R&F Property Services Group Company Limited 富力物業服務集團

The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents of this Application Proof, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Application Proof.

Application Proof of R&F Property Services Group Company Limited 富力物業服務集團有限公司 (the “Company”) (Incorporated in the Cayman Islands with limited liability)

WARNING

The publication of this Application Proof is required by The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) and the Securities and Futures Commission (the “Commission”) solely for the purpose of providing information to the public in Hong Kong.

This Application Proof is in draft form. The information contained in it is incomplete and is subject to change which can be material. By viewing this document, you acknowledge, accept and agree with the Company, its joint sponsors, advisors or members of the underwriting syndicate that:

(a) this document is only for the purpose of providing information about the Company to the public in Hong Kong and not for any other purposes. No investment decision should be based on the information contained in this document;

(b) the publication of this document or supplemental, revised or replacement pages on the Stock Exchange’s website does not give rise to any obligation of the Company, its joint sponsors, advisors or members of the underwriting syndicate to proceed with an offering in Hong Kong or any other jurisdiction. There is no assurance that the Company will proceed with the offering;

(c) the contents of this document or supplemental, revised or replacement pages may or may not be replicated in full or in part in the actual final listing document;

(d) the Application Proof is not the final listing document and may be updated or revised by the Company from time to time in accordance with the Rules Governing the Listing of Securities on the Stock Exchange;

(e) this document does not constitute a prospectus, offering circular, notice, circular, brochure or advertisement offering to sell any securities to the public in any jurisdiction, nor is it an invitation to the public to make offers to subscribe for or purchase any securities, nor is it calculated to invite offers by the public to subscribe for or purchase any securities;

(f) this document must not be regarded as an inducement to subscribe for or purchase any securities, and no such inducement is intended;

(g) neither the Company nor any of its affiliates, its joint sponsors, advisors or members of its underwriting syndicate is offering, or is soliciting offers to buy, any securities in any jurisdiction through the publication of this document;

(h) no application for the securities mentioned in this document should be made by any person nor would such application be accepted;

(i) the Company has not and will not register the securities referred to in this document under the United States Securities Act of 1933, as amended, or any state securities laws of the United States;

(j) as there may be legal restrictions on the distribution of this document or dissemination of any information contained in this document, you agree to inform yourself about and observe any such restrictions applicable to you; and

(k) the application to which this document relates has not been approved for listing and the Stock Exchange and the Commission may accept, return or reject the application for the subject public offering and/or listing.

If an offer or an invitation is made to the public in Hong Kong in due course, prospective investors are reminded to make their investment decisions solely based on the Company’s prospectus registered with the Registrar of Companies in Hong Kong, copies of which will be distributed to the public during the offer period. 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. IMPORTANT

If you are in any doubt about any of the contents of this Document, you should obtain independent professional advice.

R&F Property Services Group Company Limited 富力物業服務集團有限公司 (Incorporated in the Cayman Islands with limited liability)

[REDACTED]

Number of [REDACTED] : [REDACTED] Shares (subject to the [REDACTED]) Number of [REDACTED] : [REDACTED] Shares (subject to reallocation) Number of [REDACTED] : [REDACTED] Shares (subject to reallocation and the [REDACTED]) Maximum [REDACTED] : HK$[REDACTED] per [REDACTED], plus brokerage of 1%, Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.0027%, payable in full on application subject to refund on final pricing Nominal Value : HK$0.01 per Share [REDACTED]

Joint Sponsors and [REDACTED]

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this Document, make no representation as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Document. A copy of this Document, having attached thereto the documents specified in “Documents Delivered to the Registrar of Companies and Available for Inspection” in Appendix V to this Document, has been registered by the Registrar of Companies in Hong Kong as required by section 342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance of Hong Kong (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission and the Registrar of Companies in Hong Kong take no responsibility for the contents of this Document or any other document referred to above. The [REDACTED] is expected to be fixed by agreement between the [REDACTED] (on behalf of the [REDACTED]) and us on the [REDACTED]. The [REDACTED] is expected to be on or about [REDACTED] and, in any event, not later than [REDACTED]. The [REDACTED] will be not more than HK$[REDACTED] and is currently expected to be not less than HK$[REDACTED]. Applicants for [REDACTED] are required to pay, on application, the maximum [REDACTED] of HK$[REDACTED] for each [REDACTED] together with brokerage of 1%, SFC transaction levy of 0.0027% and Stock Exchange trading fee of 0.005%, subject to refund if the [REDACTED] should be lower than HK$[REDACTED]. If, for any reason, the [REDACTED] (on behalf of the [REDACTED]) and us are unable to reach an agreement on the [REDACTED]on[REDACTED], the [REDACTED] will not proceed and will lapse. The [REDACTED] (on behalf of the [REDACTED], and with our consent) may reduce the number of [REDACTED] and/or the indicative [REDACTED] range that stated in this Document at any time prior to the morning of the last day for lodging applications under the [REDACTED]. In such a case, a notice of the reduction in the number of [REDACTED] and/or the indicative [REDACTED] range will be published in the [South China Morning Post] (in English) and [Hong Kong Economic Times] (in Chinese) as well as the website of the Stock Exchange at www.hkex.com.hk and our website at www.rf-living.com not later than the morning of the last day for lodging applications under the [REDACTED]. Further details are set forth in “Structure of the [REDACTED] – Conditions of the [REDACTED]” and “How to Apply for [REDACTED]” in this Document. If applications for [REDACTED] have been submitted prior to the day which is the last day for lodging applications under the [REDACTED], then such applications can be subsequently withdrawn if the number of [REDACTED] and/or the indicative [REDACTED] range is so reduced. The obligations of the [REDACTED] under the [REDACTED] to subscribe for, and to procure applicants for the subscription for, the [REDACTED], are subject to termination by the [REDACTED] (on behalf of the [REDACTED]) if certain grounds arise prior to 8:00 a.m. on the day that trading in the Shares commences on the Stock Exchange. Such grounds are set out in “[REDACTED]” in this Document. It is important that you refer to that section for further details. Prior to making an investment decision, prospective investors should consider carefully all the information set forth in this Document, including but not limited to the risk factors set forth in “Risk Factors” in this Document. The [REDACTED] have not been and will not be registered under the U.S. Securities Act or any state securities law in the United States, and may not be offered, sold, pledged or transferred, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in accordance with any applicable U.S. state securities laws. The [REDACTED] are being offered and sold only outside the United States in offshore transactions in reliance on Regulation S.

[REDACTED] 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. EXPECTED TIMETABLE(1)

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–i– 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. EXPECTED TIMETABLE(1)

[REDACTED]

–ii– 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. EXPECTED TIMETABLE(1)

[REDACTED]

– iii – 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. EXPECTED TIMETABLE(1)

[REDACTED]

–iv– 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. CONTENTS

IMPORTANT NOTICE TO INVESTORS

This Document is issued by R&F Property Services Group Limited solely in connection with the [REDACTED] and does not constitute [REDACTED] or [REDACTED] to buy any security other than the [REDACTED] offered by this Document pursuant to the [REDACTED]. This Document may not be used for the purpose of, and does not constitute, [REDACTED] or [REDACTED] of [REDACTED], any security in any other jurisdiction or in any other circumstances. No action has been taken to permit a [REDACTED] of the [REDACTED] or the distribution of this Document in any jurisdiction other than Hong Kong. The distribution of this Document and the [REDACTED] and sale of the [REDACTED] in other jurisdictions are subject to restrictions and may not be made except as permitted under the applicable securities laws of such jurisdictions pursuant to registration with or authorization by the relevant securities regulatory authorities or an exemption therefrom.

You should rely only on the information contained in this Document and the [REDACTED] to make your investment decision. We have not authorized anyone to provide you with information that is different from what is contained in this Document. Any information or representation not made in this Document must not be relied on by you as having been authorized by us, the Joint Sponsors, the [REDACTED] and the [REDACTED], any of the [REDACTED], any of our or their respective directors, officers or representatives, or any other person or party involved in the [REDACTED].

Page

SUMMARY ...... 1

DEFINITIONS ...... 26

GLOSSARY OF TECHNICAL TERMS ...... 39

FORWARD-LOOKING STATEMENTS ...... 42

RISK FACTORS ...... 44

INFORMATION ABOUT THIS DOCUMENT AND THE [REDACTED]...... 83

DIRECTORS AND PARTIES INVOLVED IN THE [REDACTED]...... 87

WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES .... 92

–v– 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. CONTENTS

CORPORATE INFORMATION ...... 95

INDUSTRY OVERVIEW ...... 97

REGULATORY OVERVIEW ...... 109

HISTORY, REORGANIZATION AND CORPORATE STRUCTURE ...... 128

BUSINESS ...... 138

RELATIONSHIP WITH CONTROLLING SHAREHOLDERS ...... 219

DIRECTORS AND SENIOR MANAGEMENT...... 226

SHARE CAPITAL ...... 238

SUBSTANTIAL SHAREHOLDERS...... 241

FINANCIAL INFORMATION...... 243

FUTURE PLANS AND USE OF PROCEEDS...... 298

[REDACTED]...... 306

STRUCTURE OF THE [REDACTED]...... 312

HOW TO APPLY FOR [REDACTED] ...... 323

APPENDIX I ACCOUNTANT’S REPORT ...... I-1

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION ...... II-1

APPENDIX III SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW ...... III-1

APPENDIX IV STATUTORY AND GENERAL INFORMATION ...... IV-1

APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES AND AVAILABLE FOR INSPECTION .. V-1

–vi– 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. As this 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 leading comprehensive property management service provider in the PRC, offering a wide range of high-quality property management services and commercial property operation services. According to CIA, we were ranked 11th among the Top 100 Property Management Companies in China in terms of overall strength, based on data from the previous year on key factors such as management scale, operational performance, service quality, growth potential and social responsibility.

We provide diversified services through two business lines: residential property management services and commercial property management services. Our diverse property portfolio comprises residential and commercial properties, which primarily include retail properties, office buildings and serviced apartments. Other commercial properties that we were contracted to manage include education institutes and industrial parks. As of December 31, 2020, we managed 552 projects located in 102 cities across 26 provinces, autonomous regions and municipalities in the PRC with a total GFA under management of 69.4 million sq.m., comprising residential properties with a GFA under management of 58.1 million sq.m. and commercial properties with a GFA under management of 11.2 million sq.m. As of the Latest Practicable Date, our total GFA under management further increased to 71.6 million sq.m.

We have been providing property management services in the PRC for approximately 24 years with a geographic focus on first-tier, new first-tier and second-tier cities in the PRC. As of December 31, 2020, projects located in first-tier, new first-tier and second-tier cities accounted for approximately 25.9%, 25.9% and 25.5%, respectively, of our total GFA under management.

Historically, the growth of our business significantly benefited from the support of R&F Group, which is a large-scale property developer with a leading position in the PRC. As of December 31, 2020, R&F Group had 208 projects under development located in over 140 cities in 27 provinces, autonomous regions and municipalities across the PRC and other countries with a total land bank of approximately 64.3 million sq.m., which we believe will bring us significant growth opportunities.

We achieved robust growth during the Track Record Period. Our total GFA under management increased by 17.7% from 49.0 million sq.m. as of December 31, 2018 to 57.6 million sq.m. as of December 31, 2019, and further increased by 20.3% to 69.4 million sq.m. as of December 31, 2020. Our revenue increased by 19.0% from RMB1,823.4 million in 2018 to RMB2,170.1 million in 2019, and further increased by 19.7% to RMB2,597.4 million in 2020. In 2018, we recorded a loss for the year of RMB11.6 million. For further details, please refer to “Financial Information – Results of Operations – Year Ended December 31, 2019 Compared to Year Ended December 31, 2018”. Our profit for the year increased by 275.6% from RMB63.8 million in 2019 to RMB239.8 million in 2020.

–1– 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

OUR BUSINESS MODEL

We primarily generate revenue from two business segments:

• Residential property management services. We provide (i) basic property management services to residential properties, primarily including security services, cleaning and greening services, and repair and maintenance services; (ii) value- added services to non-property owners, including preliminary planning and design consultancy services and pre-delivery services, sales office management services and other specially commissioned services; and (iii) community value-added services, including home living services, community operation services and community living services; and

• Commercial property management services. We provide (i) basic property management services to commercial properties, primarily including security services, cleaning and greening services, and repair and maintenance services; and (ii) commercial operational and value-added services.

The following table sets forth a breakdown of our total revenue by business segments during the Track Record Period.

For the year ended December 31, 2018 2019 2020 RMB’000 % RMB’000 % RMB’000 %

Residential property management services ...... 1,091,677 59.9 1,388,771 64.0 1,757,126 67.6 Basic property management services ...... 772,193 42.3 938,783 43.3 1,123,903 43.2 Value-added services to non-property owners ...... 247,228 13.6 360,019 16.6 540,428 20.8 Community Value-added services ...... 72,256 4.0 89,969 4.1 92,795 3.6 Commercial property management services ...... 731,771 40.1 781,330 36.0 840,296 32.4 Basic property management services ...... 588,386 32.2 620,904 28.6 658,504 25.4 Commercial operational and value-added services ...... 143,385 7.9 160,426 7.4 181,792 7.0

Total...... 1,823,448 100.0 2,170,101 100.0 2,597,422 100.0

–2– 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

As of December 31, 2020, we managed 552 property projects located in 102 cities across 26 provinces, autonomous regions and municipalities in the PRC with a total GFA under management of approximately 69.4 million sq.m., comprising 295 residential property projects with a GFA under management of approximately 58.1 million sq.m. and 257 commercial property projects with a GFA under management of approximately 11.2 million sq.m. As of December 31, 2020, we had been contracted to manage 660 property projects located in 102 cities across 26 provinces, autonomous regions and municipalities in the PRC with a total contracted GFA of approximately 104.6 million sq.m., comprising 378 residential property projects with an aggregate contracted GFA of approximately 88.3 million sq.m. and 282 commercial property projects with an aggregate contracted GFA of approximately 16.3 million sq.m. As of the Latest Practicable Date, we managed 570 property projects with a total GFA under management of approximately 71.6 million sq.m., comprising 304 residential properties with a GFA under management of approximately 59.3 million sq.m. and 266 commercial property projects with a GFA under management of approximately 12.3 million sq.m., and we had been contracted to manage 671 property projects with a total contracted GFA of approximately 106.4 million sq.m., comprising 381 residential property projects with an aggregate contracted GFA of approximately 88.9 million sq.m. and 290 commercial property projects with an aggregate contracted GFA of approximately 17.4 million sq.m.

The table below sets forth a breakdown of our total revenue by type of ultimate paying customers for the years indicated.

For the year ended December 31, 2018 2019 2020 RMB’000 % RMB’000 % RMB’000 %

R&F Group ...... 231,102 12.7 335,082 15.4 593,184 22.8 R&F Group’s joint ventures or associates ...... 28,369 1.5 35,843 1.7 15,647 0.6 Independent Third Parties . .... 1,563,977 85.8 1,799,176 82.9 1,988,591 76.6

Total...... 1,823,448 100.0 2,170,101 100.0 2,597,422 100.0

Our overall gross profit in 2018, 2019 and 2020 was RMB271.3 million, RMB389.4 million and RMB644.2 million, respectively. Our overall gross profit margin in the same years was 14.9%, 17.9% and 24.8%, respectively. The following table sets forth a breakdown of our gross profit and gross profit margin by business line for the years indicated.

Year ended December 31, 2018 2019 2020 Gross Gross Gross Gross Profit Gross Profit Gross Profit Profit Margin Profit Margin Profit Margin RMB’000 % RMB’000 % RMB’000 %

Residential property management services ...... 80,513 7.4 164,143 11.8 371,839 21.2 Commercial property management services ...... 190,750 26.1 225,217 28.8 272,330 32.4

Total...... 271,263 14.9 389,360 17.9 644,169 24.8

–3– 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

Our gross profit margin experienced an upward trend during the Track Record Period. From 2018 to 2019, our gross profit margin increased from 14.9% to 17.9%, and further increased to 24.8% in 2020. Such increases were primarily due to the increases in the gross profit margin for each of our business lines.

Residential Property Management Services

Since our establishment in 1997, we have expanded our presence nationwide, and have achieved 378 contracted projects and an aggregate contracted GFA of 88.3 million sq.m. of residential properties, covering 98 cities across 26 provinces, autonomous regions and municipalities in the PRC as of December 31, 2020. The following table sets forth the number of residential properties and corresponding GFA under our management, as well as the number of residential properties we were contracted to manage, corresponding contracted GFA and undelivered GFA as of the dates indicated.

As of December 31, 2018 2019 2020

Number of residential properties under management(1) ...... 190 226 295 Number of residential properties we were contracted to manage(2) ...... 278 342 378 GFA under management (sq.m. in thousands)...... 40,097 47,477 58,142 Contracted GFA (sq.m. in thousands). . . 65,962 80,105 88,312 Undelivered GFA (sq.m. in thousands)(3) ...... 25,864 32,628 30,170

Notes:

(1) Refers to residential properties that have been delivered to us for property management purposes.

(2) Refers to all residential properties for which we have entered into the relevant operating property management service agreements, which may include residential properties that have not been delivered to us for property management purposes in addition to residential properties under management.

(3) Calculated as the difference between contracted GFA and GFA under management for residential properties as of the dates indicated.

–4– 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

The following table sets forth a breakdown of our total number of projects under management and total GFA under management for residential properties by geographic region as of the dates indicated, and our revenue from basic property management services to residential properties by geographic region for the years indicated.

As of/for the year ended December 31, 2018 2019 2020 Number Number Number of projects of projects of projects under GFA under under GFA under under GFA under management management Revenue management management Revenue management management Revenue sq.m’000. RMB’000 % sq.m’000. RMB’000 % sq.m’000. RMB’000 %

Southern China(1) .... 59 13,021 263,791 34.2 62 13,939 290,819 31.0 75 15,470 329,306 29.3 Southwestern China(2) . . 14 4,089 67,867 8.8 15 4,721 85,554 9.1 24 5,444 98,883 8.8 Northern China(3) .... 80 16,931 345,610 44.7 95 19,428 425,228 45.3 114 23,208 486,400 43.2 Northwestern China(4) . . 5 1,254 22,140 2.9 5 1,521 25,243 2.7 9 1,868 27,899 2.5 Eastern China(5) ..... 19 3,362 44,148 5.7 32 5,759 72,348 7.7 51 9,137 129,291 11.5 Central China(6) ..... 4 304 2,642 0.3 5 735 9,420 1.0 6 836 14,323 1.3 Northeastern China(7) . . . 9 1,136 25,995 3.4 12 1,374 30,171 3.2 16 2,179 37,801 3.4

Total ...... 190 40,097 772,193 100.0 226 47,477 938,783 100.0 295 58,142 1,123,903 100.0

Notes:

(1) Includes Guangdong Province and Hainan Province.

(2) Includes Sichuan Province, Chongqing Municipality, Yunnan Province and Guizhou Province.

(3) Includes Beijing Municipality, Tianjin Municipality, Hebei Province, Shanxi Province and central Inner Mongolia Autonomous Region (Hohhot City, Baotou City and Ulanqab City).

(4) Includes Shaanxi Province and Xinjiang Uygur Autonomous Region.

(5) Includes Shanghai Municipality, Jiangsu Province, Zhejiang Province, Shandong Province, Anhui Province, Fujian Province and Jiangxi Province.

(6) Includes Henan Province, Hubei Province and Hunan Province.

(7) Includes Heilongjiang Province, Liaoning Province and east Inner Mongolia Autonomous Region (Hulun Buir City, Hinggan League, Tongliao City, Chifeng City and Xilin Gol League).

–5– 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

The table below sets forth a breakdown by city tiers of our total number of residential property projects and GFA under management for residential properties as of the dates indicated, and revenue generated from basic residential property management services to residential properties for the years indicated.

As of/for the year ended December 31, 2018 2019 2020 Number of Number of Number of projects projects projects under GFA under under GFA under under GFA under management management Revenue management management Revenue management management Revenue sq.m.’000 RMB’000 % sq.m.’000 RMB’000 % sq.m.’000 RMB’000 %

First-tier cities(1) ..... 62 13,637 300,234 38.9 62 13,657 343,586 36.5 62 13,494 339,030 30.2 New first-tier cities(2) . . . 52 12,060 233,423 30.2 57 14,019 278,558 29.7 67 15,448 320,655 28.5 Second-tier cities(3) .... 54 8,480 138,002 17.9 68 11,223 173,357 18.5 83 14,457 244,041 21.7 Others(4) ...... 22 5,920 100,534 13.0 39 8,578 143,282 15.3 83 14,743 220,177 19.6

Total ...... 190 40,097 772,193 100.0 226 47,477 938,783 100.0 295 58,142 1,123,903 100.0

Notes:

(1) First-tier city in which we provide basic property management services to residential properties includes Beijing, Shanghai and Guangzhou.

(2) New first-tier city in which we provide basic property management services to residential properties includes Chengdu, Foshan, Hangzhou, Nanjing, Shenyang, Tianjin, Xi’an, Zhengzhou and Chongqing.

(3) Second-tier city in which we provide basic property management services to residential properties includes Guiyang, Harbin, Huizhou, Kunming, Langfang, Nanchang, Nantong, Ningbo, Shijiazhuang, Taiyuan, Wenzhou, Wuxi and Yantai.

(4) We also provide basic property management services to residential properties in 48 cities which are not first-tier, new first-tier or second-tier cities.

–6– We primarily offer property management services to residential properties developed by R&F Group or joint ventures and associates of R&F DOCUMENT. THIS OF COVER MUST THE INFORMATION ON THE “WARNING” THAT HEADED AND CHANGE SECTION TO THE SUBJECT WITH AND CONJUNCTION INCOMPLETE IN FORM, READ DRAFT BE IN IS DOCUMENT THIS Group. The following table sets forth a breakdown of our total number of contracted projects, total contracted GFA, total number of projects under management and total GFA under management for residential properties by developer type as of the dates indicated, as well as revenue from basic property management services to residential properties by developer type for the years indicated.

As of/for the year ended December 31, 2018 2019 2020 Number of Number of Number of Number of projects Number of projects Number of projects contracted Contracted under GFA under contracted Contracted under GFA under contracted Contracted under GFA under projects GFA management management Revenue projects GFA management management Revenue projects GFA management management Revenue sq.m’000. sq.m’000. RMB’000 % sq.m’000. sq.m’000. RMB’000 % sq.m’000. sq.m’000. RMB’000 %

R&F Group

(1) ...... 261 61,906 182 38,397 742,494 96.2 320 74,955 215 45,108 900,599 95.9 351 82,831 281 55,084 1,072,191 95.4 Joint ventures and associates of R&F Group SUMMARY (2) ..... 17 4,056 8 1,700 29,699 3.8 21 4,927 11 2,368 38,184 4.1 23 5,109 13 3,038 51,606 4.6 Independent third-party

–7– property developers (3) . . . – – – – – – 1 223 – – – – 4 372 1 20 106 0.0

Total ...... 278 65,962 190 40,097 772,193 100.0 342 80,105 226 47,477 938,783 100.0 378 88,312 295 58,142 1,123,903 100.0

Notes:

(1) Refers to properties solely developed by R&F Group or jointly developed by R&F Group and independent third-party property developers in which R&F Group held a controlling interest.

(2) Refer to properties jointly developed by R&F Group and independent third-party property developers in which R&F Group did not hold a controlling interest.

(3) Refer to properties developed solely by independent third-party property developers. 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

The following table sets forth the average property management fee per sq.m. of the residential properties under our management by developer type for the years indicated.

Property projects under management For the year ended December 31, 2018 2019 2020 RMB per sq.m. per month

Residential properties R&F Group(1)...... 2.43 2.43 2.42 Joint ventures and associates of R&F Group(2) ...... 2.28 2.30 2.33 Independent third-party property developers(3) ...... – – 2.20 Overall average property management fee for residential properties ...... 2.42 2.42 2.41

Notes:

(1) Refers to properties solely developed by R&F Group or jointly developed by R&F Group and independent third-party property developers in which R&F Group held a controlling interest.

(2) Refer to properties jointly developed by R&F Group and independent third-party property developers in which R&F Group did not hold a controlling interest.

(3) Refer to properties developed solely by independent third-party property developers.

The following table sets forth a breakdown of our revenue generated from basic property management services to residential properties by type of customer during the years indicated.

For the year ended December 31, 2019 2019 2020 RMB’000 % RMB’000 % RMB’000 %

Property developers ...... – – – – 17,228 1.5 Property owners, owner’s associations and tenants ..... 772,193 100.0 938,783 100.0 1,106,675 98.5

Total...... 772,193 100.0 938,783 100.0 1,123,903 100.0

–8– 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

Gross profit margin for our residential property management services was affected by the gross profit margins of our basic property management services to residential properties, value-added services to non-property owners and community value-added services. The following table sets forth our gross profit and gross profit margin from these three business lines for the years indicated.

Year ended December 31, 2018 2019 2020 Gross Gross Gross Gross profit Gross profit Gross profit profit margin profit margin profit margin RMB’000 % RMB’000 % RMB’000 %

Basic property management services to residential properties ...... 32,221 4.2 71,548 7.6 156,477 13.9 Value-added services to non-property owners ...... 29,063 11.8 63,419 17.6 174,068 32.2 Community value-added services ...... 19,229 26.6 29,176 32.4 41,294 44.5

Total...... 80,513 7.4 164,143 11.8 371,839 21.2

The increases in our gross profit margin for our basic property management services to residential properties from 2018 to 2020 were attributed to our effective cost control. The average residential property management fees that we charge for property management services to residential properties remained stable at RMB2.42 per sq.m. per month RMB2.42 per sq.m. per month and RMB2.41 per sq.m. per month during the Track Record Period. Our gross profit margin for basic property management services to residential properties increased from 4.2% in 2018 to 7.6% in 2019, primarily due to (i) a decrease in cost of sales per sq.m. as we expanded and realized greater economies of scale; and (ii) our effective cost control manifested by outsourcing certain services with relatively low gross profit margin, such as cleaning, security and greening services, to third-party subcontractors. Our gross profit margin for residential property management services further increased from 7.6% in 2019 to 13.9% in 2020, primarily due to the social insurance contribution exemption granted by the central and local governmental authorities in China as COVID-19 relief measures between February and December 2020.

Commercial Property Management Services

–9– 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 the PRC as of December 31, 2020. The following table sets forth the number of commercial properties and corresponding GFA under our management, as well as the number of commercial properties we were contracted to manage, corresponding contracted GFA and undelivered GFA as of the dates indicated.

As of December 31, 2018 2019 2020

Number of properties under management(1) . 203 224 257 Number of properties we were contracted to manage(2) ...... 232 263 282 GFA under management (sq.m. in thousands)...... 8,871 10,172 11,218 Contracted GFA (sq.m. in thousands)...... 11,664 14,639 16,275 Undelivered GFA (sq.m. in thousands)..... 2,793 4,467 5,056

Notes:

(1) Refers to commercial properties that have been delivered to us for property management purposes.

(2) Refers to all commercial 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.

(3) Calculated as the difference between contracted GFA and GFA under management for commercial properties as of the dates indicated.

The following table sets forth a breakdown of our total number of projects under management and total GFA under management for commercial properties by geographic region as of the dates indicated, and our revenue from basic property management services to commercial properties by geographic region for the years indicated.

As of/for the year ended December 31, 2018 2019 2020 Number of Number of Number of projects projects projects under GFA under under GFA under under GFA under management management Revenue management management Revenue management management Revenue sq.m’000. RMB’000 % sq.m’000. RMB’000 % sq.m’000. RMB’000 %

Southern China(1) . 64 3,924 351,412 59.7 69 4,486 356,204 57.5 76 5,235 370,669 56.3 Southwestern China(2) .... 21 1,354 48,449 8.2 23 1,514 59,571 9.6 26 1,638 53,602 8.1 Northern China(3) . 81 2,210 146,610 24.9 88 2,320 144,735 23.3 98 2,331 128,048 19.4 Northwestern China(4) .... 3 24 952 0.2 4 150 919 0.1 8 170 1,064 0.2 Eastern China(5) . 25 1,206 26,852 4.6 27 1,361 43,101 6.9 33 1,494 69,134 10.5 Central China(6) . 2 14 139 0.0 4 35 209 0.0 5 37 606 0.1 Northeastern China(7) .... 7 139 13,972 2.4 9 306 16,165 2.6 11 313 35,381 5.4

Total ..... 203 8,871 588,386 100.0 224 10,172 620,904 100.0 257 11,218 658,504 100.0

–10– 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

Notes:

(1) Includes Guangdong Province and Hainan Province.

(2) Includes Sichuan Province, Chongqing Municipality and Guizhou Province.

(3) Includes Beijing Municipality, Tianjin Municipality, Hebei Province, Shanxi Province, central Inner Mongolia Autonomous Region (Hohhot City, Baotou City).

(4) Includes Shaanxi Province and Xinjiang Uygur Autonomous Region.

(5) Includes Shanghai Municipality, Jiangsu Province, Zhejiang Province, Shandong Province, Anhui Province and Fujian Province.

(6) Includes Henan Province, Hubei Province and Hunan Province.

(7) Includes Heilongjiang Province, Liaoning Province and east Inner Mongolia Autonomous Region (Tongliao City).

The table below sets forth a breakdown by city tiers of our total number of commercial property projects and GFA under management for commercial properties as of the dates indicated, and revenue generated from basic property management services to commercial properties for the years indicated.

First-tier cities(1) ..... 70 3,834 414,975 70.6 73 4,272 422,108 68.0 74 4,445 441,768 67.0 New first-tier cities(2) ..... 45 2,059 83,734 14.2 48 2,168 99,754 16.1 53 2,482 86,937 13.2 Second-tier cities(3) ..... 69 2,511 87,670 14.9 77 3,030 95,872 15.4 82 3,248 122,840 18.7 Others(4) ..... 19 467 2,007 0.3 26 702 3,170 0.5 48 1,043 6,959 1.1

Total ...... 203 8,871 588,386 100.0 224 10,172 620,904 100.0 257 11,218 658,504 100.0

Notes:

(1) First-tier city in which we provide basic property management services to commercial properties includes Beijing, Shanghai and Guangzhou.

(2) New first-tier city in which we provide basic property management services to commercial properties includes Chengdu, Foshan, Hangzhou, Nanjing, Shenyang, Tianjin, Xi’an, Zhengzhou and Chongqing.

(3) Second-tier city in which we provide basic property management services to commercial properties includes Dalian, Fuzhou, Guiyang, Harbin, Huizhou, Langfang, Nantong, Taiyuan, Wuxi and Zhuhai.

(4) We also provide basic property management services to commercial properties in 30 cities which are not first-tier, new first-tier or second-tier cities.

–11– We primarily offer commercial property management services to commercial properties developed by R&F Group or joint ventures and DOCUMENT. THIS OF COVER MUST THE INFORMATION ON THE “WARNING” THAT HEADED AND CHANGE SECTION TO THE SUBJECT WITH AND CONJUNCTION INCOMPLETE IN FORM, READ DRAFT BE IN IS DOCUMENT THIS associates of R&F Group. The following table sets forth a breakdown of our total number of contracted projects, total contracted GFA, total number of projects under management and total GFA under management for commercial properties by developer type as of the dates indicated, as well as revenue from basic property management services to commercial properties by developer type for the years indicated.

R&F Group

(1) ...... 219 10,675 195 8,357 581,131 98.8 252 13,650 213 9,571 608,679 98.0 266 15,254 245 10,578 642,821 97.6 Joint ventures and associates of R&F Group SUMMARY (2) ..... 12 874 8 514 7,255 1.2 12 874 11 601 12,225 2.0 12 874 11 601 15,646 2.4 Independent third-party –12– property developers (3) . . . 1 115 – – – – 1 115 – – – – 4 147 1 39 37 0.0

Total ...... 232 11,664 203 8,871 588,386 100.0 265 14,639 224 10,172 620,904 100.0 282 16,275 257 11,218 658,504 100.0

Notes:

(1) Refers to properties solely developed by R&F Group or jointly developed by R&F Group and independent third-party property developers in which R&F Group held a controlling interest.

(2) Refer to properties jointly developed by R&F Group and independent third-party property developers in which R&F Group did not hold a controlling interest.

(3) Refer to properties developed solely by independent third-party property developers. Commercial properties that we were contracted to manage primarily include retail properties, office buildings and serviced apartments. Other DOCUMENT. THIS OF COVER MUST THE INFORMATION ON THE “WARNING” THAT HEADED AND CHANGE SECTION TO THE SUBJECT WITH AND CONJUNCTION INCOMPLETE IN FORM, READ DRAFT BE IN IS DOCUMENT THIS commercial properties that we were contracted to manage include education institutes and industrial parks. The following table sets forth a breakdown of our total number of contracted projects, total contracted GFA, total number of projects under management and total GFA under management by property type as of the dates indicated, and revenue from basic property management services to commercial properties by property type for the years indicated.

As of/for the year ended December 31, 2018 2019 2020 Number of Number of Number of Number of Number of Number of contracted Contracted projects under GFA under contracted Contracted projects under GFA under contracted Contracted projects under GFA under projects GFA management management Revenue projects GFA management management Revenue projects GFA management management Revenue sq.m’000. sq.m’000. RMB’000 % sq.m’000. sq.m’000. RMB’000 % sq.m’000. sq.m’000. RMB’000 %

Retail properties .... 104 1,514 89 838 136,247 23.2 126 2,336 103 1,336 139,998 22.5 135 2,717 126 1,661 115,844 17.7 Office buildings .... 45 4,050 42 3,782 380,436 64.6 49 4,894 45 4,066 398,320 64.2 53 5,726 47 4,276 436,182 66.2 Serviced apartments . . 81 6,092 70 4,244 71,546 12.2 88 7,401 74 4,761 82,429 13.3 90 7,570 82 5,273 106,321 16.1 Others ...... 2 8 2 8 157 0.0 2 8 2 8 157 0.0 4 262 2 8 157 0.0

Total ...... 232 11,664 203 8,871 588,386 100.0 265 14,639 224 10,172 620,904 100.0 282 16,275 257 11,218 658,504 100.0 SUMMARY –13– 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

The following table sets forth the average property management fee per sq.m. of the commercial properties under our management by developer type for the years indicated.

Property projects under management For the year ended December 31, 2018 2019 2020 RMB per sq.m. per month

Commercial properties R&F Group(1)...... 10.00 10.27 10.34 Joint ventures and associates of R&F Group(2) ...... 6.08 5.80 5.80 Independent third-party property developers(3) ...... – – 7.00 Overall average property management fee for commercial properties ...... 9.77 10.01 10.08

Notes:

(1) Refers to properties solely developed by R&F Group or jointly developed by R&F Group and independent third-party property developers in which R&F Group held a controlling interest.

(2) Refer to properties jointly developed by R&F Group and independent third-party property developers in which R&F Group did not hold a controlling interest.

(3) Refer to properties developed solely by independent third-party property developers.

–14– 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

The following table sets forth a breakdown of our revenue generated from basic property management services to commercial properties by type of customer during the years indicated.

For the year ended December 31, 2018 2019 2020 RMB’000 % RMB’000 % RMB’000 %

Property developers and property owners ...... 488,750 83.1 526,998 84.9 565,335 85.9 Tenants ...... 99,636 16.9 93,906 15.1 93,169 14.1

Total...... 588,386 100.0 620,904 100.0 658,504 100.0

Gross profit margin for our commercial property management services was affected by the gross profit margins of our basic property management services to commercial properties, and commercial operational and value-added services. The following table sets forth our gross profit and gross profit margin from these two business lines for the years indicated.

Year ended December 31, 2018 2019 2020 Gross Gross Gross Gross profit Gross profit Gross profit profit margin profit margin profit margin RMB’000 % RMB’000 % RMB’000 %

Basic property management services to commercial properties ...... 133,417 22.7 154,958 25.0 181,446 27.6 Commercial operational and value-added services ...... 57,333 40.0 70,259 43.8 90,884 50.0

Total...... 190,750 26.1 225,217 28.8 272,330 32.4

The increases in our gross profit margin for our basic property management services to commercial properties from 2018 to 2020 were contributed to (i) our outsourcing of services with relatively low gross profit margins to third-party subcontractors; and (ii) the social insurance contribution exemption granted by the central and local governmental authorities in China as COVID-19 relief measures between February 2020 and December 2020.

–15– 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

OUR COMPETITIVE STRENGTHS

We believe the following competitive strengths have contributed and will continue to contribute to our success:

• A leading comprehensive property management service provider in the PRC and a pioneer in utilizing technologies to empower services for urban development and community living;

• Strong property management and commercial operation capabilities, one of the standard-setters of commercial operational services in the PRC, and a frontrunner in integrated management services of urban renewal projects;

• Diversified service offerings and all-around service ecosystem;

• Strong support from R&F Group laying a solid foundation for our stable and sustainable growth;

• A pioneer in the integration of technology in property management services in the PRC with industry-leading technological capabilities;

• High-quality service leading to high customer satisfaction and brand reputation; and

• Experienced and visionary founders and management team, and well-established motivation mechanism and talent cultivation system.

OUR BUSINESS STRATEGIES

We are committed to becoming a pioneer in serving modern smart cities and enriching community life in the PRC. We intend to pursue the following strategies to achieve this goal:

• Increase our presence in first-tier, new first-tier and second-tier cities, solidify our leading market position, and further expand the scale of our property management services, our brand influence and our overall competency through synergistic development with R&F Group, business outreach and strategic acquisitions;

• Increase investments in technology to refine our services and increase our profitability;

• Integrate the entire value chain of asset services, cultivate community services with high added value, and enhance customer experience; and

• Further improve our human resource management, build a professional and pragmatic team, and refine talent motivation and development mechanism.

–16– 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

OUR CUSTOMERS AND SUPPLIERS

In 2018, 2019 and 2020, revenue from sales to our five largest customers amounted to RMB277.8 million, RMB393.5 million and RMB634.9 million, respectively, which accounted for approximately 15.2%, 18.2% and 24.4%, respectively, of our total revenue. During the same years, revenue from sales to our single largest customer R&F Group and its joint ventures and associates amounted to RMB259.5 million, RMB370.9 million and RMB608.8 million, respectively, which accounted for approximately 14.2%, 17.1% and 23.4%, respectively, of our total revenue. We have established ongoing business relationships and cooperation with our largest customer during the Track Record Period, R&F Group and its joint ventures and associates, for approximately 24 years. We generally did not grant credit terms to our five largest customers in 2018, 2019 and 2020. We accept payments through bank transfers. For details, see “Business – Customers.”

In 2018, 2019 and 2020, purchases from our five largest suppliers amounted to RMB72.9 million, RMB91.6 million and RMB97.4 million, respectively, which accounted for approximately 15.4%, 17.2% and 14.4%, respectively, of our total purchases. During the same years, purchases from our single largest supplier amounted to RMB32.7 million, RMB45.9 million and RMB51.7 million, respectively, which accounted for approximately 6.9%, 8.6% and 7.6%, respectively, of our total purchases. We were generally granted credit terms of one month by our five largest suppliers in 2018, 2019 and 2020. We generally make payments through bank transfers. For details, see “Business – Suppliers.”

CONTROLLING SHAREHOLDERS

Immediately upon completion of the Capitalization Issue and the [REDACTED] without taking into account any Shares which may be issued pursuant to the exercise of the [REDACTED] or any options that may be granted under the [REDACTED], each of Mr. Li, through Virtuous Charm, Prime Elegance and Jade Concord, and Mr. Zhang through Active Strength, Sun Arise and Grand Favour will control more than 30% of the voting rights at the general meeting of our Company, respectively. As a result, Mr. Li, Mr. Zhang, Virtuous Charm, Prime Elegance, Jade Concord, Active Strength, Sun Arise and Grand Favour constitute a group of controlling shareholders.

PRE-[REDACTED] INVESTMENT

Smart Up made a pre-[REDACTED] investment in our Company. See “History, Reorganization and Corporate Structure – Pre-[REDACTED] Investment” for further details.

SUMMARY KEY FINANCIAL INFORMATION

The summary historical data of financial information set forth below have been derived from, and should be read in conjunction with, our combined audited financial statements, including the accompanying notes, set forth in the Accountant’s Report attached as Appendix I to this Document, as well as the information set forth in “Financial Information.” Our financial information was prepared in accordance with HKFRS.

–17– 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

Combined Statements of Comprehensive Income

Year ended December 31, 2018 2019 2020 RMB’000

Revenue 1,823,448 2,170,101 2,597,422 Cost of sales (1,552,185) (1,780,741) (1,953,253)

Gross profit 271,263 389,360 644,169 Administrative expenses (272,423) (288,632) (325,067) Net impairment losses on financial assets (14,696) (25,517) (18,219) Other income 1,167 10,846 15,643 Other losses (818) (2,177) (1,915)

Operating (loss)/profit (15,507) 83,880 314,611

Finance income 1,817 2,115 2,640 Finance costs (61) (225) (210)

(Loss)/profit before income tax (13,751) 85,770 317,041 Income tax credit/(expenses) 2,111 (21,940) (77,290)

(Loss)/profit and total comprehensive (loss)/income for the year attributable to owners of the Company (11,640) 63,830 239,751

We experienced rapid growth in revenue during the Track Record Period, primarily due to the increases in the revenue from basic property management services, which was mainly driven by the increases in our aggregate GFA under management due to our continued and successful business expansion.

We also experienced rapid growth in gross profit as well as profit and total comprehensive income during the Track Record Period, primarily due to (i) the expansion of services with high gross profit margins, such as preliminary planning and design consultancy services as well as tenant sourcing services; (ii) our effective cost control manifested by outsourcing certain services with relatively low gross profit margin, such as cleaning and greening services, to third-party subcontractors; and (iii) the social insurance contribution exemption granted by the central and local governmental authorities in China as COVID-19 relief measures between February and December 2020. See “Financial Information – Description of Certain Combined Statements of Comprehensive Income Items” in this Document for more details.

–18– 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

Selected Items of Combined Balance Sheets

As at December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Total assets 1,825,761 1,279,083 1,761,492 Non-current assets 153,816 144,339 124,857 Property, plant and equipment 46,303 49,743 54,202 Right-of-use assets 3,645 6,005 4,863 Intangible assets 524 376 321 Deferred income tax assets 101,809 86,931 64,711 Other non-current assets 1,535 1,284 760 Current assets 1,671,945 1,134,744 1,636,635 Trade and other receivables and prepayments 1,316,511 443,803 1,230,994 Restricted cash 167 142 – Cash and cash equivalents 355,267 690,799 405,641 Total deficit (349,309) (100,479) (160,728) Combined capital 15,000 300,000 – Reserves 2,500 2,500 18,930 Accumulated losses (366,809) (402,979) (179,658) Total liabilities 2,175,070 1,379,562 1,922,220 Non-current liabilities 34,798 34,793 36,065 Lease liabilities – 240 1,190 Contract liabilities 34,798 34,553 34,875 Current liabilities 2,140,272 1,344,769 1,886,155 Lease liabilities 956 3,226 1,346 Trade and other payables 1,938,834 1,128,775 1,559,945 Current income tax liabilities 182 7,244 62,314 Contract liabilities 200,300 205,524 262,550 Net current liabilities 468,327 210,025 249,520

Our current assets decreased from RMB1,671.9 million as of December 31, 2018 to RMB1,134.7 million as of December 31, 2019, and increased back to RMB1,636.6 million as of December 31, 2020, primarily attributable to a decrease in our trade and other receivables and prepayments from RMB1,316.5 million as of December 31, 2018 to RMB443.8 million as of December 31, 2019, which was mainly driven by our collective settlement of RMB773.1 million of amounts due from related parties in 2019 in preparation of Guangzhou Fuxing’s acquisition of Tianli Property.

–19– 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

Our current liabilities decreased from RMB2,140.3 million as of December 31, 2018 to RMB1,344.8 million as of December 31, 2019, and increased back to RMB1,886.2 million as of December 31, 2020, primarily attributable to a decrease in our trade and other payables from RMB1,938.8 million as of December 31, 2018 to RMB1,128.8 million as of December 31, 2019, which was mainly driven by our collective settlement of RMB918.2 million of amounts due to related parties in 2019 in preparation of Guangzhou Fuxing’s acquisition of Tianli Property.

Our net current liabilities decreased from RMB468.3 million as of December 31, 2018 to RMB210.0 million as of December 31, 2019, primarily due to (i) an increase in cash and cash equivalents by RMB335.5 million as a result of our business expansion; and (ii) a decrease in total current liabilities driven primarily by an RMB810.1 million decrease in trade and other payables as a result of our settlement of RMB918.2 million of amounts due to related parties, as partially offset by an RMB872.7 million decrease in trade and other receivables and prepayments as a result of our effort to collect trade receivables from R&F Group as well as our improved collection rate of property management fees from third-party customers in 2019. Our net current liabilities increased from RMB210.0 million as of December 31, 2019 to RMB249.5 million as of December 31, 2020, primarily due to (i) a decrease in cash and cash equivalents by RMB285.2 million; and (ii) an increase in total current liabilities driven primarily by an RMB431.2 million increase in trade and other payables, an RMB55.1 million increase in current income tax liabilities, and an RMB57.0 million increase in contract liabilities, as partially offset by an RMB787.2 million increase in trade and other receivables and prepayments. For more details, please refer to “Financial Information – Net Current Assets or Liabilities.”

We recorded accumulated losses of RMB366.8 million, RMB403.0 million and RMB179.7 million, respectively, as of December 31, 2018, 2019 and 2020, which were primarily attributable to (i) the relatively low property management fees and the relatively high staff and maintenance costs of the loss-making properties under our management; and (ii) the free property management services that we provided with respect to certain unsold property units before the Track Record Period as we provided property management services to certain properties developed by R&F Group as a functional subsidiary.

Selected Items of Combined Statements of Cash Flows

Year ended December 31, 2018 2019 2020 RMB’000

Cash generated from operations 116,955 175,028 242,546 Interest received 1,817 2,115 2,640 Interest paid (61) (225) (210) Net cash generated from operating activities 118,711 176,918 244,976 Net cash used in investing activities (83,544) (131,404) (526,002) Net cash generated from/(used in) financing activities 13,314 290,018 (4,132) Net increase/(decrease)in cash and cash equivalents 48,481 335,532 (285,158) Cash and cash equivalents at beginning of year 306,786 355,267 690,799 Cash and cash equivalents at end of year 355,267 690,799 405,641

–20– 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

Our net cash flows generated from operating activities increased significantly from RMB176.9 million in 2019 to RMB245.0 million in 2020, primarily attributable to the significant increases in adjustments for contract liabilities and trade and other payables, as partially offset by decreases in changes in trade and other receivables and prepayments as well as allowance for impairment of trade and other receivables. Our net cash flows used in investing activities increased significantly from RMB131.4 million in 2019 to RMB526.0 million in 2020, primarily attributable to a significant increase in cash advances to related parties in 2020. Our net cash flows generated from financing activities increased significantly from RMB13.3 million in 2018 to RMB290.0 million in 2019, primarily attributable to the capital injection from the then shareholders of the Group of RMB295.0 million in 2019, as partially offset by an increase in principal elements of lease payments. Our net cash used in financing activities was RMB4.1 million in 2020 as compared to our net cash generated from financing activities of RMB290.0 million in 2019, primarily due to RMB4.1 million of principal elements of lease payments that we made. Please refer to “Financial Information – Liquidity and Capital Resources – Cash Flow” for more details.

Summary of Key Financial Ratios

The following table sets forth certain of our key financial ratios as of the dates and for the years indicated.

As of/for the year ended December 31, 2018 2019 2020

Current ratio (times) 0.8 0.8 0.9 Liabilities to assets ratio (%) 119.1 107.9 109.1 Return on total assets (%) (0.8) 5.5 20.9 Return on equity (%) N/A N/A N/A

Our return on total assets was negative 0.8% as of December 31, 2018, and turned positive to 5.5% as of December 31, 2019, primarily because (i) we had a loss for the year of RMB11.6 million in 2018 and a profit for the year of RMB63.8 million in 2019; and (ii) there was a decrease in our total assets from RMB1,825.8 million in 2018 to RMB1,279.1 million driven primarily by an RMB872.7 million decrease in trade and other receivables and prepayments in 2019. Our return on total assets further increased significantly from 5.5% as of December 31, 2019 to 20.9% as of December 31, 2020, primarily attributable to (i) our continuous exploration and diversification of new services with high gross profit margins; (ii) our outsourcing of services with relatively low gross profit margins to third-party subcontractors; and (iii) the growth of our total comprehensive income outpaced the growth of our total assets due to the social insurance contribution exemption granted by the central and local governmental authorities in China as COVID-19 relief measures between February and December 2020.

Our return on equity was not applicable as of December 31, 2018, 2019 and 2020 due to negative total equity as a result of the accumulative losses that we incurred in 2019 and 2020, which were mainly attributable to (i) the relatively low property management fees and the relatively high labor cost and maintenance costs of the loss-making properties under our management; and (ii) the free property management services that we provided with respect to certain unsold property units before the Track Record Period as we provided property management services to certain properties developed by R&F Group as a functional subsidiary.

Please refer to “Financial Information – Summary of Key Financial Ratios” in this Document for the definitions of these financial ratios and an analysis on their fluctuation during the Track Record Period.

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[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 Based on an [REDACTED] of [REDACTED] of HK$[REDACTED] HK$[REDACTED] per [REDACTED] per [REDACTED]

HK$[REDACTED] HK$[REDACTED] Market capitalization of our Shares million million Unaudited pro forma adjusted net tangible asset value per Share(1) HK$[REDACTED] HK$[REDACTED]

Note:

(1) 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.”

DIVIDEND POLICY

The Group has declared dividends of nil, RMB100.0 million, and nil, respectively, to our shareholders during the year of 2018, 2019 and 2020. The declaration, payment and amount of any future dividends, if any, will be at the sole discretion of our Board of Directors and will also depend on various factors that our Board of Directors deem relevant. Any declaration and payment as well as the amount of dividends will be subject to our constitutional documents and the relevant laws.

USE OF PROCEEDS

We estimate that we will receive net proceeds of approximately HK$[REDACTED] million from the [REDACTED], after deducting the [REDACTED] and other estimated expenses payable by us in connection with the [REDACTED], assuming that the [REDACTED] is not exercised, and assuming an [REDACTED] of HK$[REDACTED]per Share (being the mid-point of the indicative [REDACTED] range set forth on the cover page of this Document). We intend to use such net proceeds from the [REDACTED]forthe purposes and in the amounts set forth below:

• approximately [REDACTED]%, or approximately HK$[REDACTED] million, will be used to expand our property management services and commercial operational services through business outreach, strategic acquisitions and equity investments;

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• approximately [REDACTED]%, or approximately HK$[REDACTED] million, will be used to expand our value-added services, and integrate the resources in both the upstream and downstream supply chain of our industry;

• approximately [REDACTED]%, or approximately HK$[REDACTED] million, will be used to further upgrade our information technology systems to increase the profitability of our residential and commercial property management services; and

• approximately [REDACTED]%, or approximately HK$[REDACTED] million, will be used for general business operations and working capital.

For more information, see “Future Plans and Use of Proceeds.”

RECENT DEVELOPMENTS AND NO MATERIAL ADVERSE CHANGE

Recent Development of Our Business Operations

Since December 31, 2020 and up to the Latest Practicable Date, our number of contracted projects and total contracted GFA increased to 671 and approximately 106.4 million sq.m., including 381 contracted projects and approximately 88.9 million sq.m. for residential properties and 290 contracted projects and approximately 17.4 million sq.m. for commercial properties. Among our contracted projects as of the Latest Practicable Date, we had six residential and nine commercial contracted projects developed by independent third-party property developers with the aggregate contracted GFA of approximately 0.6 million sq.m. and 1.1 million sq.m., representing 0.6% and 6.2% of our total contracted GFA, for residential properties and commercial properties, respectively.

In addition, since December 31, 2020 and up to the Latest Practicable Date, our number of property projects under management and total GFA under management increased to 570 and approximately 71.6 million sq.m., including 304 property projects under management and approximately 59.3 million sq.m. for residential properties and 266 property projects under management and approximately 12.3 million sq.m. for commercial properties. Among our property projects under management as of the Latest Practicable Date, we had two residential and seven commercial property projects under management developed by independent third-party property developers with the total GFA under management of approximately 0.1 million sq.m. and 1.0 million sq.m., representing 0.2% and 8.1% of our total GFA under management, for residential properties and commercial properties, respectively.

COVID-19 Pandemic

An outbreak of respiratory illness caused by a novel coronavirus, namely COVID-19, was reported in December 2019 and expanded globally. 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 response to the COVID-19 pandemic, we have adopted various hygiene and precautionary measures across the properties under our management since late January 2020. See “Business – Effects of the COVID-19 Pandemic – Our Response to the COVID-19 Pandemic.”

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We incurred additional costs for implementing these enhanced measures of approximately RMB3.9 million in 2020. This primarily represents increased labor costs to carry out these measures as well as costs for purchasing protective materials such as face masks, ethanol hand wash, disinfectants, and infrared thermometers. Our Directors confirm that the additional costs associated with the enhanced measures will not have a significant impact on our Group’s financial position or results of operations in 2021.

Since the outbreak of the COVID-19 pandemic and up to the Latest Practicable Date, we had not encountered any material disruption to the services provided by our subcontractors and utilities service providers and the supply of materials from our suppliers. Our Directors consider that while the supply chains in all industries may be affected to a certain extent by the COVID-19 pandemic, particularly due to the prolonged suspension of business operations and the instability of a workforce arising from the mandatory quarantine requirements, in view of the nature of our business, our Directors do not expect that we will encounter any material disruptions of our supply chain given that we do not rely on any particular service subcontractors or material suppliers and there are many other subcontractors and suppliers in the market as back-up. In view of the foregoing, our Directors believe that we can continue to provide our services and discharge our obligations under existing contracts.

In the long term, however, the COVID-19 pandemic is expected to bring about opportunities to the property management industry. During the fight against the COVID-19 pandemic, property management companies played a significant role, serving as a bridge among the government, community workers and residents. We believe our efforts to control the outbreak has earned us higher degrees of trust and reliance from property owners and residents at properties under our management. 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 presents us significant opportunities to expand our related service offerings. 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.

We believe that our expansion plan as discussed “Business – Development Strategies” is feasible, and it is unlikely that we would change the use of the net proceeds received by our Company from the [REDACTED] as disclosed in “Future Plans and Use of Proceeds” in this Document as a result of the COVID-19 pandemic. However, we are still subject to certain risks caused by the COVID-19 pandemic. For details, see “Business – Effects of the COVID-19 Pandemic” and “Risk Factors – Risks Relating to Our Business and Industry – Our prospects may be adversely affected by COVID-19 or other adverse public health developments.”

No Material Adverse Change

Our Directors confirmed that, as of the date of this Document, there has been no material adverse change in our financial or trading position, indebtedness, mortgage, contingent liabilities, guarantees or prospects since December 31, 2020, the latest date of our financial statements.

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[REDACTED] EXPENSES

The total amount of [REDACTED] expenses that will be borne by us in connection with the [REDACTED], including [REDACTED], is estimated to be RMB[REDACTED] million (HK$[REDACTED] million) (based on the midpoint of the indicative [REDACTED] range and assuming the [REDACTED] is not exercised) of which approximately RMB[REDACTED] million (HK$[REDACTED] million) is expected to be accounted for as a deduction from equity upon [REDACTED] and RMB[REDACTED] million (HK$[REDACTED] million) is expected to be charged to our combined statement of comprehensive income for the year ending December 31, 2021. The amount of the [REDACTED] expenses is expected to account for [REDACTED]% of the gross proceeds from the [REDACTED]. The professional fees and/or other expenses related to the preparation of the [REDACTED] are currently in estimates for reference only and the actual amount to be recognized is subject to adjustment based on audit and the then changes in variables and assumptions. Our Directors expect that our [REDACTED] expenses will adversely affect our financial performance for the year ending December 31, 2021.

RISK FACTORS

Our operations involve certain risks, some of which are beyond our control. These risks can be broadly categorized into: (i) risks relating to our business and industry; (ii) risks relating to doing business in the PRC; and (iii) risks relating to the [REDACTED]. Some of the risks generally associated with our business and industry include the following:

• Our business strategies are subject to uncertainties and risks and our future growth may therefore not materialize as planned.

• Our strategic plan to further diversify and expand our services may not succeed as planned or at a desirable pace in the future.

• We may fail to secure new or renew our existing residential and commercial property management service contracts on favorable terms, or at all.

• We may experience fluctuations in our labor and subcontracting costs.

• We may be subject to losses and our profit margins may decrease if we fail to control our costs in rendering our property management services on a lump sum basis.

• A significant portion of our revenue is from residential and commercial property management provided in relation to properties developed and/or owned by R&F Group, which was also our single largest customer during the Track Record Period.

• Our future acquisitions or investments may not be successful and we may face difficulties in integrating acquired operations with our existing operation.

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 forth in this Document and, in particular, should evaluate the specific risks set forth in “Risk Factors” in this Document in deciding whether to invest in our Shares.

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In this Document, unless the context otherwise requires, the following terms shall have the meanings set out below. Certain other terms are explained in “Glossary of Technical Terms” in this Document.

“Active Strength” Active Strength Holdings Limited (敏力控股有限公司), a business company incorporated in the BVI with limited liability on August 26, 2020, which is directly wholly owned by Mr. Zhang and is one of our Controlling Shareholders;

[REDACTED]

“Articles of Association” or the amended and restated articles of association of the “Articles” Company, conditionally adopted on [●], 2021 and will become effective upon the [REDACTED], a summary of which is set out in Appendix III to this Document;

“associates” has the meaning ascribed to it under the Listing Rules;

“Beijing Hengfu Property” Beijing Hengfu Property Services Co., Ltd. (北京恆富物業服務有限公司), a limited liability company established in the PRC on December 11, 2002, an indirect wholly- owned subsidiary of our Company;

“Board” or “Board of Directors” the board of Directors of our Company;

“Business Day” or “business a day on which banks in Hong Kong are generally open day” for normal banking business to the public and which is not a Saturday, a Sunday or a public holiday in Hong Kong;

“BVI” the British Virgin Islands;

“CAGR” compound annual growth rate;

“Capitalization Issue” the issue of [REDACTED] Shares to be made upon capitalization of certain sum standing to the credit of the share premium account of the Company as referred to in “Statutory and General Information – A. Further Information about our Company – 3. Written Resolutions of our Shareholders Passed on [●], 2021” in Appendix IV to this Document;

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[REDACTED]

“China” or the “PRC” the People’s Republic of China, but for the purpose of this Document and for geographical reference only and except where the context requires, references in this Document to “China” and the “PRC” do not include Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan;

“Chinese Government” or “PRC the central government of the PRC and all governmental Government” subdivisions (including provincial, municipal and other regional or local government entities) and instrumentalities thereof or, where the context requires, any of them;

“close associate(s)” has the meaning ascribed to it under the Listing Rules;

“Companies Act” the Companies Act (as amended) of the Cayman Islands;

“Companies Ordinance” the Companies Ordinance (Chapter 622 of the laws of Hong Kong), as amended, supplemented or otherwise modified from time to time;

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“Companies (Winding up and the Companies (Winding Up and Miscellaneous Miscellaneous Provisions) Provisions) Ordinance (Chapter 32 of the laws of Hong Ordinance” Kong), as amended, supplemented or otherwise modified from time to time;

“Company”, “the Company”, or R&F Property Services Group Company Limited (富力物 “our Company” 業服務集團有限公司), an exempted company incorporated in the Cayman Islands with limited liability on December 24, 2020;

“connected person(s)” has the meaning ascribed to it under the Listing Rules;

“Controlling Shareholder(s)” has the meaning ascribed to it under the Listing Rules and, unless the context requires otherwise, refers to Mr. Li, Mr. Zhang, Virtuous Charm, Prime Elegance, Jade Concord, Active Strength, Sun Arise and Grand Favour;

“core connected person(s)” has the meaning ascribed to it under the Listing Rules;

“COVID-19” a viral respiratory disease caused by a novel coronavirus, which is now believed to have first emerged in late 2019;

“CSRC” China Securities Regulatory Commission (中國證券監督管理委員會), a regulatory body responsible for the supervision and regulation of the PRC national securities markets;

“Datong Hengfu” Datong Hengfu Property Services Co., Ltd. (大同恆富物業服務有限公司), a limited liability company established in the PRC on December 20, 2012, an indirect wholly- owned subsidiary of our Company;

“Deed of Indemnity” the deed of indemnity dated [●], 2021 executed by our Controlling Shareholders in favor of our Company (for ourselves and for each of our subsidiaries), as further described under “Statutory and General Information – D. Other Information – 2. Tax and Other Indemnities” in Appendix IV to this Document;

“Director(s)” or “our Directors” the director(s) of our Company;

“Document” this document being issued in connection with the [REDACTED];

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“EIT Law” the Enterprise Income Tax Law of the PRC (中華人民共和國企業所得稅法), as amended, supplemented or otherwise modified from time to time;

“Exchange Participant(s)” a person: (a) who, in accordance with the Listing Rules, may trade on or through the Stock Exchange; and (b) whose name is entered in a [REDACTED], register or roll kept by the Stock Exchange as a person who may trade on or through the Stock Exchange;

“Fubo Property” Guangzhou Fubo Property Services Co., Ltd. (廣州富博物業服務有限公司), a limited liability company established in the PRC on August 19, 2020, an indirect wholly-owned subsidiary of our Company;

“Fulin Commercial” Guangzhou Fulin Commercial Operation Co., Ltd. (廣州富鄰商業運營有限公司), a limited liability company established in the PRC on June 15, 2020, an indirect wholly-owned subsidiary of our Company;

“Fuyao Property” Guangzhou Fuyao Property Services Co., Ltd. (廣州富耀物業服務有限公司), a limited liability company established in the PRC on August 12, 2020, an indirect wholly-owned subsidiary of our Company;

“Fuyun Property” Guangzhou Fuyun Property Services Co., Ltd. (廣州富雲物業服務有限公司), a limited liability company established in the PRC on November 26, 2020, an indirect wholly-owned subsidiary of our Company;

[REDACTED]

“Grand Favour” Grand Favour Holdings Limited (鴻澤控股有限公司), a business company incorporated in the BVI with limited liability on October 16, 2020, which is directly wholly owned by Mr. Zhang and is one of our Controlling Shareholders;

[REDACTED]

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“Group”, “the Group”, “our our Company and, except where the context otherwise Group”, “we” or “us” requires, all of its subsidiaries or where the context refers to any time prior to its incorporation, the business which its predecessors or the predecessors of its present subsidiaries were engaged in and which were subsequently assumed by it;

“Guangzhou Fuxing” Guangzhou Fuxing Investment Consulting Co., Ltd. (廣州富星投資諮詢有限公司), a limited liability company established in the PRC on December 11, 2019, an indirect wholly-owned subsidiary of our Company;

“Hangzhou R&F Commercial” Hangzhou R&F Commercial Services Co., Ltd. (杭州富力商業服務有限公司), a limited liability company established in the PRC on November 22, 2018, an indirect wholly-owned subsidiary of our Company;

“Hengfu Club” Beijing Hengfu Recreation Club Co., Ltd. (北京恆富休閒俱樂部有限公司), a limited liability company established in the PRC on July 10, 2014, an indirect wholly-owned subsidiary of our Company;

“HKFRS” the Hong Kong Financial Reporting Standards;

[REDACTED]

“HK$” or “Hong Kong dollars” Hong Kong dollars and cents respectively, the lawful “HK dollars” or “cents” currency of Hong Kong;

“Hong Kong” the Hong Kong Special Administrative Region of the PRC;

[REDACTED]

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[REDACTED]

“Huaxin Property” Tianjin Huaxin Property Management Co., Ltd. (天津華信物業管理有限公司) (formerly known as Tianjin Huaxin Real Estate Co., Ltd. (天津華信置業有限公司)), a limited liability company established in the PRC on April 23, 2004, an indirect wholly-owned subsidiary of our Company;

“Independent Third Party(ies)” an individual or a company who, as far as the Directors are aware after having made all reasonable enquiries is not a connected person of the Company within the meaning of the Listing Rules;

[REDACTED]

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[REDACTED]

“Jade Concord” Jade Concord Enterprises Limited (翠和企業有限公司), a business company incorporated in the BVI with limited liability on October 16, 2020, which is directly wholly owned by Mr. Li and is one of our Controlling Shareholders;

“Jifu Property” Urumqi Jifu Property Services Co., Ltd. (烏魯木齊極富物業服務有限公司), a limited liability company established in the PRC on August 10, 2018, an indirect wholly-owned subsidiary of our Company;

[REDACTED]

“Joint Sponsors” ABCI Capital Limited and China International Capital Corporation Hong Kong Securities Limited;

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“Junxi Investment” Longmen Junxi Investment Co., Ltd. (龍門縣駿熹投資有限公司), a limited liability company established in the PRC on August 9, 2012, an indirect wholly-owned subsidiary of our Company;

“Junxi Property” Guangzhou Junxi Property Management Co., Ltd. (廣州市駿熹物業管理有限公司), a limited liability company established in the PRC on August 13, 2007, an indirect wholly-owned subsidiary of our Company;

“Latest Practicable Date” April 21, 2021, being the latest practicable date for the purpose of ascertaining certain information in this Document prior to its publication;

[REDACTED]

“[REDACTED] Committee” the [REDACTED] Committee of the Stock Exchange;

[REDACTED]

“Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, as amended, supplemented or otherwise modified from time to time;

“M&A Rules” the Rules on the Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (關於外國投資者併購境內企業的規定), jointly issued by the State-owned Assets Supervision and Administration Commission of the State Council (國務院國有資產監督管理委員會), MOFCOM, SAT, SAMR, CSRC and SAFE on August 8, 2006 and re-issued by MOFCOM on June 22, 2009;

“Main Board” the stock exchange (excluding the option market) operated by the Stock Exchange, which is independent from and operated in parallel with the Growth Enterprise Market of the Stock Exchange;

“MOF” Ministry of Finance of the PRC (中華人民共和國財政部);

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“MOFCOM” Ministry of Commerce of the PRC (中華人民共和國商務部) or its predecessor, the Ministry of Foreign Trade and Economic Cooperation of the PRC (中華人民共和國對外貿易經濟合作部);

“MOHURD” Ministry of Housing and Urban and Rural Development (中華人民共和國住房與城鄉建設部);

“Mr. Li” Mr. Li Sze Lim (李思廉), one of our Controlling Shareholders;

“Mr. Zhang” Mr. Zhang Li (張力), one of our Controlling Shareholders;

“NDRC” the National Development and Reform Commission of the PRC (中華人民共和國國家發展和改革委員會);

[REDACTED]

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“PBOC” the People’s Bank of China (中國人民銀行), the central bank of the PRC;

“People’s Congress” The PRC’s legislative apparatus, including the National People’s Congress and all the local people’s congresses (including provincial, municipal and other regional or local people’s congresses) as the context may require, or any of them;

“PRC Legal Advisors” Commerce & Finance Law Offices, our legal advisors as to PRC laws;

[REDACTED]

“Prime Elegance” Prime Elegance Holdings Limited (元雅控股有限公司), a business company incorporated in the BVI with limited liability on October 12, 2020, which is directly wholly owned by Mr. Li and is one of our Controlling Shareholders;

“Qifu Property” Lanzhou Qifu Property Services Co., Ltd. (蘭州啟富物業服務有限公司), a limited liability company established in the PRC on September 11, 2020, an indirect wholly- owned subsidiary of our Company;

“R&F Group” R&F Properties and its subsidiaries;

“R&F Properties” Guangzhou R&F Properties Co., Ltd. (廣州富力地產股份有限公司), a joint stock company established in the PRC with limited liability on July 14, 2005 and [REDACTED] on the Stock Exchange (stock code: 2777);

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“R&F Property Services HK” R&F Property Services Group HK Company Limited (富力物業服務集團香港有限公司), a company incorporated in Hong Kong on February 9, 2021 and an indirect wholly-owned subsidiary of our Company;

“Regulation S” Regulation S under the U.S. Securities Act;

“Reorganization” the reorganization of our Group in preparation of the [REDACTED], details of which are set out in “History, Reorganization and Corporate Structure” in this Document;

“SAFE” the State Administration of Foreign Exchange of the PRC (中華人民共和國國家外匯管理局);

“SAIC” the State Administration for Industry and Commerce of the PRC (中華人民共和國國家工商行政管理總局);

“SAT” State Administration of Taxation of the PRC (中華人民共和國國家稅務總局);

“Securities and Futures the Securities and Futures Ordinance (Chapter 571 of the Ordinance” or “SFO” Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time;

“SFC” the Securities and Futures Commission of Hong Kong;

“Share(s)” ordinary share(s) with par value of HK$0.01 each in the share capital of the Company, which are to be traded in Hong Kong dollars and [REDACTED] on the Main Board;

“Shareholders” holders of our Shares;

“Smart Up” Smart Up Corporate Development Limited (陞卓企業發展有限公司), a limited liability company incorporated under the laws of the BVI on May 17, 2018, an Independent Third Party and our pre-[REDACTED] investor

“sq.m.” the measurement unit of square meters;

[REDACTED]

“State Council” State Council of the PRC (中華人民共和國國務院);

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[REDACTED]

“Stock Exchange” The Stock Exchange of Hong Kong Limited;

“subsidiary(ies)” has the meaning ascribed to it under the Listing Rules;

“substantial shareholder(s)” has the meaning ascribed to it under the Listing Rules;

“Sun Arise” Sun Arise Holdings Limited (正旭控股有限公司), a business company incorporated in the BVI with limited liability on October 16, 2020, which is directly wholly owned by Mr. Zhang and is one of our Controlling Shareholders;

“Tianli Property” Guangzhou Tianli Property Development Co., Ltd. (廣州天力物業發展有限公司), a limited liability company established in the PRC on December 10, 1997, an indirect wholly-owned subsidiary of our Company;

“Track Record Period” the period comprising the years ended December 31, 2018, 2019 and 2020;

[REDACTED]

“United States” or “U.S.” the United States of America, its territories, its possessions and all areas subject to its jurisdiction;

“U.S. dollars” or “US$” United States dollars, the lawful currency of the United States;

“U.S. Securities Act” the United States Securities Act of 1933, as amended and supplemented or otherwise modified from time to time, and the rules and regulations promulgated thereunder;

“VAT” the PRC value-added tax;

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“Virtuous Charm” Virtuous Charm Limited (賢麗有限公司), a business company incorporated in the BVI with limited liability on September 29, 2020, which is directly wholly owned by Mr. Li and is one of our Controlling Shareholders;

“Wealth Best Global” Wealth Best Global Limited (富良環球有限公司), a business company incorporated in the BVI with limited liability on October 19, 2020, a direct wholly-owned subsidiary of our Company;

[REDACTED]

“Yueshanhu Property” Minhou Yueshanhu Property Co., Ltd. (閩侯縣悅山湖物業有限公司), a limited liability company established in the PRC on October 29, 2019, an indirect wholly-owned subsidiary of our Company;

“%” per cent.

Unless the content otherwise requires, references to “2018”, “2019” and “2020” in this Document refers to our financial year ended December 31 of such year.

Certain amounts and percentage figures included in this Document have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures preceding them.

For ease of reference, the names of the PRC laws and regulations, governmental authorities, institutions, natural persons or other entities (including certain of our subsidiaries) have been included in the Document in both the Chinese and English languages and in the event of any inconsistency, the Chinese versions shall prevail. English translations of official Chinese names are for identification purpose only.

* for identification purposes only

–38– 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. GLOSSARY OF TECHNICAL TERMS

In this Document, unless the context otherwise requires, explanations and definitions of certain terms used in this Document in connection with our Group and our business shall have the meanings set out below. The terms and their meanings may not correspond to standard industry meaning or usage of these terms.

“average property management calculated based on the property management fees fee(s)” specified under each of the property management service contracts adjusted proportionately by the GFA under management under each of the corresponding property management service contracts;

“bidding success rate” the aggregate number of bids we won as of the end period divided by the aggregate number of bids we submitted as of the end of that same period;

“Bohai Economic Rim” an economic region in China including Beijing, Tianjin, Hebei, Shandong, Shanxi, Inner Mongolia and Liaoning, for purposes of this Document;

“collection rate of property calculated by dividing the commercial property management fees” management fees we receive during a period by the total property management fees payable to us accumulated during that same period;

“commercial properties” properties which are used primarily for commercial purposes, including retail properties, office buildings, serviced apartments and others;

“contracted GFA” GFA managed or to be managed by our Group under our operating property management service contracts, including both GFA under management and undelivered GFA;

“first-tier cities” cities specified by the CBNData (第一財經商業數據中心) as such, being Beijing, Shanghai, Guangzhou and Shenzhen in 2020. The cities in each tier were scored and ranked by CBNData (第一財經商業數據中心)onfive dimensions, namely (i) concentration of business resources, (ii) traffic, (iii) residents’ participation in activities, (iv) variety of lifestyles, and (v) future potential, and were then categorized into different tiers. Pursuant to the 2020 Ranking of Cities by Business Appeal (《2020城市商業魅力排行榜》) published by CBNData, among 337 cities, excluding Hong Kong, Macau and Taiwan, four were categorized as first-tier cities, 15 as new first-tier cities, 30 as second-tier cities, 70 as third-tier cities, 90 as fourth-tier cities, and 128 as fifth-tier cities;

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“Greater Bay Area” an economic region in China encompassing Hong Kong, Macau, Guangzhou, Shenzhen, Zhuhai, Foshan, Dongguan, Zhongshan, Zhaoqing, Huizhou, and Jiangmen, for the purpose of this Document;

“GFA” gross floor area;

“GFA under management” the portion of GFA of (i) properties that have been delivered to us for property management purposes under residential property management service segment; or (ii) commercial properties under our management which are in operation. GFA of car parks are included for purpose of calculating GFA under management;

“IoT” or “Internet of Things” a network of physical devices, vehicles, buildings and other item embedded with electronics, software, sensors and network connectivity that enable these objects to collect and exchange data;

“lump-sum basis” a revenue-generating model whereby we charge a pre- determined property management fee per sq.m. for all units (whether sold or unsold) on a periodic basis which represents the “all-inclusive” fees for all of the residential property management services provided by our employees and subcontractors. Property developers, property owners and residents will be responsible for paying our property management fees for the sold and unsold units respectively on a periodic basis;

“new first-tier cities” cities specified by the CBNData (第一財經商業數據中心) as such, being Chengdu, Chongqing, Hangzhou, Wuhan, Xi’an, Tianjin, Suzhou, Nanjing, Zhengzhou, Changsha, Dongguan, Shenyang, Qingdao, Hefei and Foshan in 2020;

“renewal rate” the number of renewed property management service contracts in the period divided by the number of property management service contracts which expired in the same period;

“residential communities” or properties which are purely residential or mixed-use “residential properties” properties containing residential units and ancillary facilities that are nonresidential in nature such as commercial or office units but excluding pure commercial properties;

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“retention rate” the aggregate number of properties under management as of the end of the period divided by the aggregate number of properties under management as of the end of the period and properties we cease to manage during that same period;

“second-tier cities” cities specified by the CBNData (第一財經商業數據中心) as such, Ningbo, Kunming, Fuzhou, Wuxi, Xiamen, Jinan, Dalian, Harbin, Wenzhou, Shijiazhuang, Quanzhou, Nanning, Changchun, Nanchang, Guiyang, Jinhua, Changzhou, Huizhou, Jiaxing, Nantong, Xuzhou, Taiyuan, Zhuhai, Zhongshan, Baoding, Lanzhou, Taizhou, Shaoxing, Yantai and Langfang;

“Yangtze River Delta Region” an economic region in China encompassing Shanghai, parts of Zhejiang province and parts of Jiangsu province, including but not limited to Nanjing, Suzhou, Jiaxing, Huzhou, Taizhou, Chuzhou, Lu’an, Nantong and Wuhu, for the purpose of this Document.

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We have included in this Document forward-looking statements. Statements that are not historical facts, including statements about our intentions, beliefs, expectations or predictions for the future, are forward-looking statements.

This Document contains certain forward-looking statements and information relating to the Company and its subsidiaries that are based on the beliefs of our management as well as assumptions made by and information currently available to our management. When used in this Document, the words “aim,” “anticipate,” “believe,” “can,” “continue,” “could,” “forecast,” “expect,” “going forward,” “intend,” “ought to,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would” and the negative of these words and other similar expressions, as they relate to our Group or our management, are intended to identify forward-looking statements. Such statements reflect the current views of our management with respect to future events, operations, liquidity and capital resources, some of which may not materialize or may change. These statements are subject to certain risks, uncertainties and assumptions, including the other risk factors as described in this Document. You are strongly cautioned that reliance on any forward-looking statements involves known and unknown risks and uncertainties. The risks and uncertainties facing the Company which could affect the accuracy of forward-looking statements include, but are not limited to, the following:

• our business prospects;

• our business and operating strategies and our ability to implement such strategies;

• our ability to control or reduce costs;

• our capability to identify and integrate suitable acquisition targets;

• our ability to maintain a strong relationship with major suppliers or customers;

• our dividend policy;

• any changes in the laws, rules and regulations of the central and local governments in the PRC and the rules, regulations and policies of the relevant governmental authorities relating to all aspects of our business and our business plans;

• the future competitive environment for the PRC property management industry;

• general economic, political and business conditions in the PRC real estate markets and property management industries;

• the effect of the global financial markets and economic crisis;

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• capital market development;

• interest rate and exchange rate fluctuations and restrictions;

• determination of the fair value of our Shares;

• certain statements in “Financial Information” with respect to trends in prices, volumes, operations, margins, overall market trends, risk management and exchange rates; and

• risks identified under “Risk Factors” of this Document.

This Document also contains market data and projections that are based on a number of assumptions. The markets may not grow at the rates projected by the market data, or at all. The failure of the markets to grow at the projected rates may materially and adversely affect our business and the market price of our Shares. In addition, due to the rapidly changing nature of the PRC economy and the property management industry, projections or estimates relating to the growth prospects or future conditions of the markets are subject to significant uncertainties. If any of the assumptions underlying the market data prove to be incorrect, actual results may differ from the projections based on these assumptions. You should not place undue reliance on these forward-looking statements.

We do not guarantee that the transactions and events described in the forward-looking statements in this Document will happen as described, or at all. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including, without limitation, the risks and uncertainties set forth in “Risk Factors” in this Document. You should read this Document in its entirety and with the understanding that actual future results may be materially different from what we expect. The forward-looking statements made in this Document relate only to events as of the date on which the statements are made or, if obtained from third-party studies or reports, the dates of the respective studies or reports. Since we operate in an evolving environment where new risks and uncertainties may emerge from time to time, you should not rely upon forward-looking statements as predictions of future events. We undertake no obligation, beyond what is required by law, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made, even when our situation may have changed.

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An investment in our Shares involves various risks. You should carefully consider the following information about risks, together with the other information contained in this Document, including our combined financial statements and related notes, before you decide to purchase our Shares. If any of the circumstances or events described below actually arises or occurs, our business, results of operations, financial position and prospects would likely suffer. In any such case, the market price of our Shares could decline, and you may lose all or part of your investment. You should also pay particular attention to the fact that our subsidiaries in China are located in a legal and regulatory environment that in some respects differ significantly from that of other countries. For more information concerning the PRC legal and regulatory system and certain related matters discussed below, see the section headed “Regulatory Overview” in this Document.

We believe that there are certain risks and uncertainties involved in our operations, some of which are beyond our control. We have categorized these risks and uncertainties into: (i) risks relating to our business and industry; (ii) risks relating to conducting business in the PRC; and (iii) risks relating to the [REDACTED]. Additional risks and uncertainties that are not presently known to us or that we currently deem immaterial may develop and become material and could also harm our businesses, financial position and results of operations.

RISKS RELATING TO OUR BUSINESS AND INDUSTRY

Our business strategies are subject to uncertainties and risks and our future growth may therefore not materialize as planned.

We experienced fast growth in GFA under management, revenue, gross profit and gross profit margin during the Track Record Period. In 2018, 2019, and 2020, our GFA under management was 49.0 million sq.m, 57.6 million sq.m and 69.4 million sq.m, respectively, representing a CAGR of 19.0% from 2018 to 2020; our revenue was RMB1,823.4 million, RMB2,170.1 million and RMB2,597.4 million, respectively, representing a CAGR of 19.4% from 2018 to 2020; our gross profit was RMB271.3 million, RMB389.4 million and RMB644.2 million, respectively, representing a CAGR of 54.1% from 2018 to 2020; our gross profit margin was 14.9%, 17.9% and 24.8%, respectively, representing a CAGR of 29.0% from 2018 to 2020. During the same years, the aggregated GFA to which we provide residential property management services amounted to approximately 40.1 million sq.m., 47.5 million sq.m. and 58.1 million sq.m., respectively; the aggregated GFA to which we provide commercial property management services amounted to approximately 8.9 million sq.m., 10.2 million sq.m. and 11.2 million sq.m., respectively.

We seek to continue to expand our business by increasing the aggregate GFA and the number of properties under our management in existing and new markets, including properties developed by R&F Group, joint ventures and associates of R&F Group, and Independent Third

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Parties. See “Business – Development Strategies – Increase our presence in first-tier, new first-tier and second-tier cities, consolidate our leading market position, and further expand the scale of our property management services, our brand influence and our overall competency through synergistic development with R&F Group, business outreach and strategic acquisitions” in this Document for more details. However, we base our expansion plans on our assessment of market prospects. We cannot assure you that our assessment will prove to be correct or that we can grow our business as planned. Our expansion plans may be affected by a number of factors, most of which are beyond our control. Such factors include:

• changes in the PRC’s economic conditions in general, the real estate industry, and the property management market in particular;

• changes in disposable personal income in the PRC;

• changes in government regulations or policies;

• changes in the supply of and demand for residential property management and commercial operational services;

• natural disasters and epidemic, such as COVID-19;

• our ability to generate sufficient liquidity internally and obtain external financing;

• our ability to recruit and train competent employees;

• our ability to select and work with suitable third-party subcontractors and suppliers;

• our ability to understand the needs of residents or tenants in the residential properties where we provide residential property management services or tenants in the commercial properties where we provide commercial operational services;

• our ability to diversify our services offering and to optimize our business mix;

• our ability to adapt to new markets where we have no prior experience and in particular, whether we can adapt to the administrative, regulatory and tax environments in such markets;

• our ability to solidify our market position in existing market and our ability to leverage our brand names and to compete successfully in new markets, particularly against the incumbent players in such markets who might have more resources and experience than we do; and

• our ability to improve our administrative, technical, operational and financial infrastructure.

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Since our business strategies are subject to uncertainties and risks, we cannot assure you that our future growth will materialize. Our business, financial condition, results of operations and growth prospects could be materially and adversely affected if our future plans fail to achieve positive results.

Our strategic plan to further diversify and expand our services may not succeed as planned or at a desirable pace in the future.

We have diversified our services by providing various value-added services to meet the evolving needs of our customers, primarily including property owners, residents, tenants and property developers. The types of properties we were contracted to manage include residential properties, commercial properties such as retail properties, office buildings, serviced apartments and others. However, with limited operating history and experience in certain regions, we may face unknown risks, rising expenses and fierce competition in the market. We have encountered and expect to continue to encounter risks and difficulties frequently experienced in relation to new service offerings, and those risks and difficulties may be heightened in a rapidly evolving market. Those risks and difficulties may affect our ability to:

• attract and retain customers and qualified employees;

• develop and maintain close cooperation with strategic partners to offer certain services;

• maintain effective control of our development as well as operating costs and expenses;

• develop and maintain internal personnel, systems, controls and procedures to comply with the extensive regulatory requirements applicable to the relevant industries;

• cater for various consumer preferences, or anticipate product or service trends that will appeal to existing or potential customers;

• respond to competitive market conditions and changes in industry environments; or

• respond to changes in regulatory environment.

Our failure to achieve any of the above may jeopardize our ability to offer newly introduced value-added services, as well as other new services we plan to launch. We are dedicated to satisfying our customers’ needs by further strengthening our capabilities to provide and diversify our value-added services. See “Business – Development Strategies – Integrate the entire value chain of asset services, cultivate community services with high added value, and enhance customer experience” Moreover, we may consider entering into agreements with the construction companies to provide repair and maintenance services on their behalf during the post-delivery warranty periods of properties and charge service fees on a lump sum

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Furthermore, we cannot assure you that our investment in our value-added services business can be recouped in a timely manner, or at all, or our investment return would be higher than that of other comparable companies. Our development of and investment in diversified services may be subject to PRC laws and regulations governing license approval and renewal. See “Regulatory Overview – Chinese Laws and Regulations Related to Foreign Investment.” We cannot assure you that we can obtain or renew our license on time, if at all. We cannot assure you that our future strategic development plan, which is based upon our forward-looking assessment of market prospects and customer preferences, will always turn out to be successfully. A number of factors beyond our control may also affect our plan for the development of diversified services, including changes in the PRC’s economic conditions in general, government policies and regulations on relevant industries, and changes in supply and demand for our services. Any of the foregoing could adversely affect our business, financial position and results of operations.

We may fail to secure new or renew our existing residential and commercial property management service contracts on favorable terms, or at all.

During the Track Record Period, we procured new residential and commercial property management service contracts primarily through making tender bids. The selection of a property management service provider depends on a number of factors, including but not limited to the quality of services, the level of pricing and the operating history of the property management service provider. In 2018, 2019, and 2020, the success rate of our tender bids for residential properties developed by R&F Group for which we provided residential property management services was 100.0%; the success rate of our tender bids for commercial properties developed by R&F Group for which we provided commercial property management services was 100.0%. During the Track Record Period, the success rate of our tender bids for properties developed by the joint ventures and associates of R&F Group was 100.0%. We cannot assure you that we will be able to procure new residential and commercial property management service contracts on favorable terms, or at all. Our efforts may be hindered by factors beyond our control, which may include, among others, changes in general economic conditions, evolving government regulations as well as supply and demand dynamics within the property management industry.

During the Track Record Period, we entered into preliminary management contracts with property developers during the later stages of property development. Such contracts are transitional in nature and facilitate the transfer of legal and actual control of the properties from property developers to individual property owners. We would enter into property management service contracts with the property owners’ associations upon their establishment. Preliminary management contracts typically expire when property management service contracts are

–47– 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. RISK FACTORS entered into between property owners’ associations of properties and us. See “Business – Residential Property Management Services – Property Management Service Agreements” in this Document for details. We cannot assure you that the property owners’ associations will enter into property management service contracts with us instead of our competitors. Our customers select us based on parameters such as quality and cost, and we cannot assure you that we will always be able to balance such parameters diligently.

Even when we succeed in entering into property management service contracts with property owners’ associations, we cannot assure you that they will be renewed upon expiration. During the Track Record Period, our renewal rate for the properties under our management was 100.0%, 100.0% and 97.1%, respectively, in 2018, 2019, and 2020. It is also possible that our property management service contracts may be terminated for cause. In such cases, our business and results of operations could be materially and adversely affected. There is no guarantee that we would be able to find other business opportunities and enter into alternative property management service contracts on favorable terms, or at all. In addition, both termination and non-renewal of property management service contracts could potentially be detrimental to our reputation and diminish our competitiveness within the industry.

We may experience fluctuations in our labor and subcontracting costs.

In 2018, 2019, and 2020, our labor costs accounted for 70.8%, 71.2%, and 66.6% of our total cost of sales, respectively. We also engage third-party subcontractors to provide cleaning, greening and gardening, and repair and maintenance services for all properties under our management and security services for some properties under our management. In 2018, 2019, and 2020, our cleaning, greening, maintenance, security and fire protection costs, which were primarily outsourced to third-party subcontractors, amounted to RMB215.2 million, RMB260.7 million and RMB373.0 million, respectively, which accounted for approximately 13.9%, 14.6% and 19.1%, respectively, of our total cost of sales. We believe that controlling and reducing our labor and subcontracting costs are essential to maintaining and improving our profit margins. However, we face pressure from rising labor and subcontracting costs due to various contributing factors, including but not limited to:

• Increase in minimum wage – The minimum wage in regions we operate has increased substantially in recent years, directly affecting our labor costs as well as the fees we pay to our third-party subcontractors.

• Increase in headcount – As we expand our operations, the headcount of our residential property and commercial property management staff, sales and marketing staff and administrative staff will continue to grow. We will also need to retain and continuously recruit qualified employees to meet our growing demand for talent, which will further increase our total headcount. In addition, as we continue to expand our business scale, we plan to increase the usage of third-party subcontractors. The increase in headcount will also increase our costs such as those related to salaries, training, social insurance and housing provident fund contributions and quality control measures.

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• Delay in implementing technological solutions, service standardization and other measures to reduce our reliance on manual labor and cost of services – Usually there is a lapse between the time we begin commercial operational services or residential property management services for a particular property and the time we start implementing any of our measures to reduce our reliance on manual labor and cost of services. Before we carry out such measures, our ability to mitigate the impact of any increases in labor and subcontracting costs is limited.

We cannot assure you that we will be able to control our costs or improve our operational efficiency. If we fail to achieve this goal, our business, financial condition and results of operations could be materially and adversely affected.

We may be subject to losses and our profit margins may decrease if we fail to control our costs in rendering our property management services on a lump sum basis.

We generated all of our revenue for our property management services on a lump sum basis. On a lump sum basis, we charge property management fees at a predetermined fixed price per sq.m. per month, representing all-inclusive fees for the property management services provided. When total costs and expenses incurred exceed the amount of property management fees we receive, we bear the shortfall and may not charge additional fees to property developers, property owners or residents during the contract term. In 2018, 2019 and 2020, we incurred losses of RMB59.7 million, RMB37.9 million and RMB40.3 million, respectively, with respect to 56, 53 and 59 residential property projects under our management, respectively. Such losses were primarily due to (i) the relatively low property management fees and the relatively high labor cost and maintenance costs of these properties; and (ii) the free property management services that we provided with respect to certain unsold property units before the Track Record Period as we provided property management services to certain properties developed by R&F Group as a functional subsidiary. Our revenue from property management services from such loss-making properties was approximately RMB270.3 million, RMB303.5 million and RMB222.7 million in 2018, 2019 and 2020, respectively, representing 35.0%, 32.4% and 19.9% of our total revenue from basic property management services to residential properties for the same years, respectively. In 2018, 2019 and 2020, we incurred losses of RMB23.3 million, RMB13.8 million and RMB9.2 million, respectively, with respect to 51, 53 and 52 commercial property projects under our management, respectively. Such losses were primarily due to the relatively low property management fees and the relatively high labor cost and maintenance costs of these properties. Our revenue from property management services from such loss-making properties was approximately RMB95.5 million, RMB80.7 million and RMB59.5 million in 2018, 2019 and 2020, respectively, representing 16.3%, 13.0% and 9.1% of our total revenue from basic property management services to commercial properties for the same years, respectively.

To improve our profitability, we can either try to improve our fee rates when renewing service agreements, or control our costs and expenses through a series of cost-saving initiatives. However, our ability to mitigate losses through cost-saving initiatives, such as operation automation measures to reduce labor costs and energy-saving measures to reduce energy costs, may not be successful. Moreover, our cost-saving efforts may negatively affect the quality of our property management services, which in turn will reduce owners’ willingness to pay us property management fees. We may be also subject to local regulations on price

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A significant portion of our revenue is from residential and commercial property management provided in relation to properties developed and/or owned by R&F Group, which was also our single largest customer during the Track Record Period.

During the Track Record Period, R&F Group was our single largest customer, and a significant portion of our residential and commercial property management service contracts were related to the management of properties developed by R&F Group. In 2018, 2019, and 2020, we generated 72.6%, 69.5% and 66.0% of our total revenue from property management services to properties developed by R&F Group. During the same period, revenue generated from our residential property management services to properties developed by R&F Group amounted to RMB742.5 million, RMB900.6 million, and RMB1,072.2 million, respectively, accounting for approximately 40.7%, 41.5% and 41.3%, respectively, of our total revenue; revenue generated from our commercial property management services to properties developed by R&F Group amounted to RMB581.1 million, RMB608.7 million, and RMB642.8 million, respectively, accounting for approximately 31.9%, 28.0% and 24.7% of our total revenue.

As we do not have control over R&F Group’s business strategy, nor the macroeconomic or other factors that affect their business operations, any adverse development in the operations of R&F Group or its ability to develop new properties may affect our ability to procure new residential and commercial property management service contracts. In addition, we cannot assure you that all of our residential and commercial property management service contracts with R&F Group will be renewed successfully upon their expiration. We cannot assure you that we will be successful in procuring service contracts from alternative sources to make up for the shortfall in a timely manner or on favorable terms. Though we plan to expand our business by seeking cooperation with Independent Third Parties, we cannot assure you that we will be successful in doing so. Should any of these events occur, our business, financial condition and results of operations could be materially and adversely affected.

Our future acquisitions or investments may not be successful and we may face difficulties in integrating acquired operations with our existing operation.

We will, to a certain extent, expand our business through acquisitions, and plan to evaluate opportunities to acquire other property management companies and other businesses that are complementary to our existing businesses and integrate their operations into ours. However, we cannot assure you that we will be able to identify suitable opportunities. Even if we manage to identify suitable opportunities, we may not be able to complete the acquisitions on terms favorable or acceptable to us, in a timely manner, or at all. The inability to identify suitable acquisition targets or to complete acquisitions could materially and adversely affect our competitiveness and growth prospects.

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Acquisitions, even if completed, will involve uncertainties and risks, including, without limitation:

• potential ongoing financial obligations and unforeseen or hidden legal, regulatory, financial or other liabilities;

• inability to apply our business model or standardized business processes on the acquisition targets;

• failure to achieve the intended objectives, synergy benefits or revenue-enhancing opportunities;

• failure to protect and maintain the acquired rights relating to brand names and/or other material intellectual property rights;

• assumption of debt and liabilities of the acquired companies, some of which may not have been revealed during the due diligence process; and

• diversion of resources and management attention.

Approximately [REDACTED]%, or HK$[REDACTED] million, of the net proceeds received by our Company from the [REDACTED] is expected to be used to pursue selective strategic investment and acquisition opportunities and further develop strategic alliances. See “Future Plans and Use of Proceeds – Use of Proceeds” in this Document. If we fail to identify suitable acquisition opportunities or our future acquisition transactions fail to consummate for other reasons which may be beyond our control, our proceeds from the [REDACTED] may not be effectively used.

Moreover, we may require additional cash resources to finance our continued growth or other future developments, including any investments or acquisitions we may decide to pursue. To the extent that our funding requirements exceed our financial resources, we will be required to seek additional financing or to defer planned expenditures. Interest rate increases or other unfavorable changes in the financial markets may increase our cost of borrowing or adversely affect our ability to access sources of liquidity upon which we may rely to finance our operations and satisfy our obligations as they become due. There is no assurance that we will be able to obtain sufficient financing on favorable terms, or at all, to fund our future expansion. Furthermore, if we raise additional funds through equity or equity-linked financings, your equity interest in our Company may be diluted. Alternatively, if we raise additional funds by incurring debt obligations, we may be subject to various covenants under the relevant debt instruments that may, among other things, restrict our ability and flexibility to operate our business, pay dividends or obtain additional financing. Servicing such debt obligations could also be burdensome to our operations. If we fail to service such debt obligations or are unable to comply with any of these covenants, we could be in default under such debt obligations and our liquidity and financial condition could be materially and adversely affected.

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Furthermore, we may face difficulties in, and additional risks of, integrating acquired operations with our existing business. The difficulties and risks will be affected by different factors, including, among others, the complexity and size of the acquired business. Particularly, we may face the difficulties in retaining the acquired company’s personnel and integrating the existing workforce with that of the acquired companies. Such difficulties could disrupt our ongoing business, distract the attention of our management and employees or increase our expenses. The prior dealings of the acquired company may have given rise to situations which, although unknown or deemed immaterial during due diligence could be exposed post- acquisition and cause damage to our brand. We may also face the risks of operating in new markets with local regulations unfamiliar to us and incur additional hidden costs associated with the acquisition. Any of these difficulties or risks could materially and adversely affect our business, financial condition and results of operations.

Acquisitions may result in goodwill recorded in our combined financial statements. If we fail to achieve our desired objectives with respect to our acquisitions, we may need to record impairment losses on our goodwill, which may materially and adversely reduce our assets and impact our profitability that would, in turn, have an adverse effect on our financial position and results of operations.

Our prospects may be adversely affected by COVID-19 or other adverse public health developments.

An outbreak of respiratory illness caused by a novel coronavirus, namely COVID-19, was identified in late 2019 and spread globally in over 200 countries and territories. In March 2020, the World Health Organization characterized the outbreak of COVID-19 a pandemic. The accelerated spread of the virus globally has caused extreme volatility in the global financial markets. For example, China experienced a slower-than-usual growth of 3.2% in its GDP in the second quarter of 2020, following a steep 6.8% slump in the first quarter, which was the biggest contraction since its quarterly GDP records began. In addition, the U.S. economy suffered its sharpest downturn since at least the 1940s in the second quarter of 2020, with its GDP shrinking 9.5% from the first quarter, a drop that equals an annualized pace of 32.9%, and the US stock markets experienced extreme volatilities that repeatedly triggered stock market “circuit breakers.” The COVID-19 pandemic has had an adverse impact, and may continue to cause adverse impacts in the long-term, on the economy and social conditions in China and other affected countries, and this may have an adverse impact on the PRC property development and management industries and adversely affect our business operations. For example, to comply with the requirements of local governments with respect to community management during the outbreak of the COVID-19 pandemic, we assigned personnel to conduct visitor control for properties under our management. In addition, revenue from property management services decreased as a result of the suspension of certain services to prevent the spread of the virus, such as the temporary closure of air conditioning system, during the outbreak of the COVID-19 pandemic. While the COVID-19 pandemic appears to be contained in China for the time being, international travels and business activities have been substantially reduced which may have a material adverse impact on the Chinese economy. We are uncertain as to when the COVID-19 pandemic will be contained globally or whether it may

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We may encounter difficulties in collecting our residential property management and commercial operational service fees, which could lead to impairment losses on our trade receivables.

We may encounter difficulties when collecting our residential property management fees in communities with relatively high vacancy rates, or service fees where a tenant has experienced decreases in consumer traffic in its retail store or any difficulties in continuing operations for any other factors for commercial property management. Delays in receiving such fees would adversely affect our cash flow position and our ability to meet our working capital requirements. Even though we seek to collect overdue service fees and rents through a number of collection measures, we cannot assure you that such measures will be effective or enable us to accurately predict our future collection rate.

Our allowance for impairment of trade receivables amounted to RMB90.6 million, RMB113.6 million and RMB115.5 million, respectively, as of December 31, 2018, 2019 and 2020. Our overall collection rate of property management fees was 90.0%, 89.7% and 91.0%, respectively, in 2018, 2019 and 2020. Our collection rate of residential property management fees was 88.9%, 89.4%, and 92.8%, respectively, in 2018, 2019, and 2020. Our collection rate of commercial property management fees was 96.4%, 97.2%, and 97.7%, respectively, in 2018, 2019, and 2020. Pursuant to the terms of our property management service contracts, property owners are typically required to pay their property management fee on a quarterly basis and we normally receive payment for our residential property management services within 90 days after the issuance of the demand notes at the beginning of each quarter. However, certain property owners do not pay their property management fees in accordance with the terms of the relevant property management service contracts and tend to pay such fees in one or more installments during or towards the end of a year. As a result, the collection rate of our property management fees continues to increase towards the end of a year.

Although our management’s estimates and the related assumptions were made in accordance with information available to us, such estimates or assumptions may need to be adjusted if new information becomes known. See “Financial Information – Significant Accounting Policies, Accounting Estimates and Judgments” in this Document for details. In the event that actual recoverability is lower than expected, or that our past allowance for impairment of trade receivables becomes insufficient in light of any new information, we may need to provide for an additional allowance for impairment of trade receivables, which could in turn materially and adversely affect our business, financial condition and results of operations.

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Brand and reputation are our key assets, which will be affected by how we are perceived in the marketplace.

Brand and reputation and their attributes are our key assets. We provide property management services under the brand of R&F Property Management. Our ability to attract and retain customers is highly dependent upon the external perceptions of our level of service, trustworthiness, business practices, management, workplace culture, financial condition, our response to unexpected events and other subjective qualities. Negative perceptions or publicity, including adverse information on the Internet, regarding these matters, even if related to seemingly isolated incidents and whether or not factually correct, could erode trust and confidence and damage our reputation among existing and potential clients, which could make it difficult for us to attract new customers and maintain existing ones, and could have material adverse effect on the trading price of our Shares.

We believe our continued success depends on our ability to preserve, grow and leverage the value of our brand and reputation. The protection of our brand, including related trademarks, may require the expenditure of significant financial and operational resources. Moreover, the steps we take to protect our brand may not adequately protect our rights or prevent third parties from infringing or misappropriating our trademarks. Even when we detect infringement or misappropriation of our trademarks, we may not be able to enforce all such trademarks. Any unauthorized use by third parties of our brand may adversely affect our brand. As we continue to expand our business, there is also a risk we may face claims of infringement or other alleged violations of third-party intellectual property rights, which may restrict us from leveraging our brand in a manner consistent with our business goals.

In addition, accidents may occur in the ordinary course of our business, and we may be exposed to media coverages as well as claims for injuries and fatality sustained by our employees, subcontractors, or unrelated third parties. Such occurrences may damage our reputation not only within the property management industry but also among the general public.

We face a wide range of competition and may fail to compete effectively and operate profitably.

We compete with other property management service providers that operate on national, regional and local scales. They may have stronger capital resources, longer operating histories, better track records, greater brand or name recognition, greater expertise in regional and local markets and greater financial, technical, marketing and public relations resources than we do. They may also be better positioned than we are to compete for customers, financing, skilled management and labor resources, and devote more resources to the development, expansion, and promotion of their residential and commercial property management services. In addition, property developers may establish their own in-house property management businesses or engage their affiliated service providers. These developments may reduce the availability of business opportunities and customers as there would be fewer property developers in the market who would be willing to refer business to us. Since our competitors may seek to

–54– 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. RISK FACTORS emulate our business model, we may lose our competitive edge should we fail to continue improving and thereby distinguish ourselves from other service providers. Our customers may opt to work with our competitors upon the expiry of our existing service contracts as competitive pressures intensify, and we may be less likely to successfully obtain new service contracts.

In addition, our efforts to compete may compel us to reduce prices for our residential and commercial property management services, while competitive pressures may force us to further enhance service quality, thereby increasing our cost of services. We cannot assure you that we will be able to pass additional costs to our customers. Failures to compete effectively may erode our profit margins and market share, which could in turn materially and adversely affect our business, financial condition, results of operations and growth potential.

After we begin providing commercial operational services in the future, we will also face competition from e-commerce, new retail, and other forms of business that provide similar services. In that case, we will likely be competing on several factors, including, among others, operation scale, service quality and price, customer base, technical capabilities, brand recognition and financial resources.

We are exposed to liabilities from disputes involving losses or damages incurred by products and services marketed through our community value-added services as well as other incidents that may occur in our ordinary course of business.

We may encounter incidents during the course of our business which may materially and adversely affect our business operations. Claims may arise due to our employees’ or third-party subcontractors’ negligence or recklessness when providing community value-added services, particularly grocery delivery services. In addition, product liability may arise from reselling or advertising the products or services through our community value-added services, particularly our group purchase facilitation services and ticketing agency services, under the Laws on the Protection and Rights and Interests of Consumers of the PRC (《中華人民共和國消費者權益保護法》), the Tort Law of the PRC (《中華人民共和國侵權責任法》) and other relevant PRC laws and regulations.

For instance, claims may be brought against us by purchasers, regulatory authorities or other third parties alleging, among others, that: (i) the quality of the products sold or services provided by or through us fail to conform to required product or service quality; (ii) advertisements made in common areas with respect to such products or services are false, deceptive, misleading, libelous, injurious to the public welfare otherwise offensive; (iii) such products or services are defective or injurious and may be harmful to others; and (iv) such marketing, communication or advertising infringe on the proprietary rights of other third parties. These occurrences could result in damage to, or destruction of, properties of the communities, personal injury or death and legal liability. Violation of product quality and safety requirements by third-party vendors may subject us to confiscation of related earnings,

–55– 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. RISK FACTORS penalties or an order to cease sales of the defective products. If the offense is determined to be serious, our business license to sell these products could be suspended or revoked and we could be ordered to cease operations pending rectification.

In addition, any food and beverage contamination could also subject us to product liability claims, adverse publicity, government scrutiny, investigation or intervention, or product returns, resulting in increased costs, and any of these events could adversely affect our business, results of operations and financial condition. We cannot guarantee that our suppliers are in full compliance with all the relevant health and safety standards, licensing or permits requirements, customs clearance and quality control measures in such processes before the supply of raw materials to us. Also, nuts, eggs and dairy products are common ingredients used in our restaurant dishes. If we are not made aware of such food allergies when the dishes are prepared for our catering services, the consumption of such food items by our customers may cause severe allergic reactions, food poisoning and health hazards.

We rely on third-party subcontractors and service providers to perform certain property management and other services and may be held responsible for their substandard services to our customers and cost overruns.

During the Track Record Period, we delegated certain property management services, primarily including cleaning, greening and gardening, and repair and maintenance services, to third-party subcontractors. In 2018, 2019, and 2020, our cleaning, greening, maintenance, security and fire protection costs, which were primarily outsourced to third-party subcontractors, amounted to approximately RMB215.2 million, RMB260.7 million and RMB373.0 million, respectively, accounting for approximately 13.9%, 14.6% and 19.1% of our total cost of sales, respectively. We select our third-party subcontractors based on factors such as professional qualifications, industry reputation and service quality. However, we cannot assure you that they will always perform in accordance with our expectations and we may not be able to monitor their services as directly and efficiently as with our own services. They may take actions contrary to our or our customers’ instructions or requests, or be unable or unwilling to fulfill their obligations. As a result, we may have disputes with our subcontractors, or may be held responsible for their actions, either of which could lead to damages to our reputation, additional expenses and business disruptions and potentially expose us to litigation and damage claims.

We cannot assure you that upon the expiration of our agreements with our current third-party subcontractors, we will be able to renew such agreements or find suitable replacements in a timely manner, on terms acceptable to us, or at all.

In addition, if our third-party subcontractors fail to maintain a stable team of qualified manual labor or do not have easy access to a stable supply of qualified manual labor or fails to perform their obligations properly or in a timely manner, the work process may be interrupted. Any interruption to the third-party subcontractors’ work process may potentially result in a breach of the contract between our customers and us. Any of such events could materially and adversely affect our service quality, our reputation, as well as our business, financial position and results of operations.

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We may fail to enhance our operational efficiencies and service quality through using our digital platform.

We use our big data platform to integrate online and offline information and resources, to connect consumers with us and allow them to easily access our services, and to enhance our operational efficiencies and service quality in providing property management services. Our big data platform is composed of Zizai Smart Community System (自在平台系統), purchase management system (物業採購系統), Yongyou fee collection system (用友收費系統), human resource information system (人力資源信息化系統), attendance management system (人事考勤系統), and talent pool system (人才庫系統). We expect to improve operational efficiencies and service quality by using our big data platform. However, the future growth of our big data platform depends on our ability to continue to understand the requirements for management of maintenance services and customers’ needs and preference. Given the ever-changing business environment and customers’ emerging needs and issues, we must stay abreast of the changes and develop features that will streamline the management of maintenance services and appeal to existing and potential users. We cannot assure you that our big data platform will develop and keep pace with the new requirements emerged in the process of providing our maintenance service and solutions for employee benefits. If our customers and staff cannot use the big data platform to file and manage maintenance requests, or if our big data platform cannot provide necessary and appealing features for our corporate customers and their employees, they may lose interest in our big data platform and thus may use it less frequently, if at all, which in turn, could materially adversely affect our business, financial condition and results of operations. As a result, we also cannot assure you that our investment in the big data platform can be recovered in a timely manner, or at all, or our return would be comparable to those of other companies.

In addition, we engaged third-party service providers to build and maintain the big data platform for us, hence, the communication as well as steady relationships with such third-party service providers are essential for the successful delivery and performance of our big data platform. In the event that our communication and relationship with such third-party service providers do not go as planned, we may need to incur additional costs in resolving the issues or even finding replacements, which may adversely affect our business operations. If we fail to develop and launch the big data platform as planned, we may not be able to grow our business and reduce labor costs as expected.

We are subject to risks arising from any failure of or inadequacies in our big data platform.

We may encounter technical problems, security issues and logistical issues that may prevent our big data platform from functioning properly and our users from receiving desired products and services. If we are unable to resolve such problems in a timely manner, or at all, we may lose our existing users or face lower user engagement. In addition, we may not be able to recruit sufficient qualified personnel to support the growth of our big data platform. See “Business – Smart Information Platform” However, our future development of and investment in our big data platform may be subject to PRC laws and regulations governing license approval and renewal and we cannot assure you that we can obtain or renew our license on time, if at all. Any of the foregoing could adversely affect our reputation, business, financial condition and results of operations.

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We may experience failures in or disruptions to our information technology systems.

We rely on our information technology systems to manage key operational functions including, among others, managing and monitoring daily business operations and settling payments with our customers. However, we cannot assure you that damages or interruptions caused by power outages, computer viruses, hardware and software failures, telecommunication failures, fires, natural disasters, security breaches and other similar occurrences relating to our information systems will not occur going forward. We may incur significant costs in restoring any damaged information technology systems. Failures in or disruptions to our information technology systems and loss or leakage of confidential information could cause transaction errors, processing inefficiencies and the loss of customers and sales. We may thus experience material adverse effects on our business and results of operations.

Failure to protect confidential information of our customers and our network against security breaches, any actual or perceived failure by us or third parties to comply with applicable data protection laws and regulations or privacy policies could harm our business, financial condition and results of operations.

We collect, store and process personal and other sensitive data from our customers, such as addresses and phone numbers. Our security measures may be breached due to employee error, malfeasance, system errors or vulnerabilities, or otherwise. Outside parties may also attempt to fraudulently induce employees to disclose sensitive information in order to gain access to our data or our customers’ data. While we have taken steps to protect the confidential information that we have access to, our security measures could be breached. Because techniques used to sabotage or obtain unauthorized access to systems change frequently and generally are not recognized until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. Any accidental or willful security breaches or other unauthorized access to our platforms could cause confidential customer information to be stolen and used for unlawful purposes. Security breaches or unauthorized access to confidential information could also expose us to liability related to the loss of the information, time-consuming and expensive litigation and negative publicity.

Under the Cyber Security Law of the People’s Republic of China (《中華人民共和國網絡安全法》) (the “Cyber Security Law”), network operators are generally obligated to protect their networks against disruption, damage or unauthorized access, and to prevent data leakage, theft or tampering. In addition, they will also be subject to specific rules depending on their classification under the multi-level network security protection scheme. With respect to personal information protection, the Cyber Security Law requires network operators not to disclose, tamper with or damage personal information collected or generated in the business operation, and they are obligated to delete unlawfully collected information and to amend incorrect information. In addition, network operators may not collect, use or provide personal information to others without consent. Moreover, the Provisions on Protection of Personal Information of Telecommunication and Internet Users (《電信和互聯網用戶個人信息保護規定》) is the specialized regulation governing the collection and use of personal information of

–58– 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. RISK FACTORS users in the provision of telecommunication service and Internet information services. These laws and regulations are relatively new and evolving, and their interpretation and enforcement involve significant uncertainties. The evolving PRC regulations regarding (i) data collection, usage and transfer; and (ii) cyber security may lead to future restrictions and the establishment of new regulatory agencies, and we may bear more legal responsibilities and compliance costs, which may have an adverse effect on our prospects. If security measures are breached because of third-party action, employee error, malfeasance or otherwise, or if design flaws in our technology infrastructure are exposed and exploited, our reputation and brands could be severely damaged and we could incur significant liability, and our business, financial condition and results of operations could be adversely affected.

We are exposed to risks associated with the use of third-party online payment platforms.

We accept payments via various methods, including but not limited to online payments through third-party platforms such as WeChat Pay and Alipay. Transactions conducted through WeChat Pay and Alipay involve the transmission of confidential information such as credit card numbers, personal information and billing addresses over public networks. In recent years, the use of third-party platforms in the PRC has grown in parallel with consumer confidence in their security and efficiency. However, we do not have control over the security measures taken by providers of our third-party platforms. In the event that the security and integrity of these third-party platforms are compromised, we may experience material adverse effects on our ability to process our service fees. We may also be perceived as partially responsible for failures to secure personal information and be subjected to claims alleging possible liability brought by the customers. Such legal proceedings could damage our reputation and materially and adversely affect our business, financial condition and results of operations. In addition, the PRC Government may yet promulgate new laws and policies to regulate the use of third-party online payment platforms. Such measures may increase our compliance and operational costs, for example by requiring that we pay higher transaction fees.

Our success depends on the retention of our senior management team and our ability to attract and retain qualified and experienced employees.

Our continued success depends on the efforts of our senior management team and other key employees. As they possess key connections and industry expertise, losing their services may have a material adverse effect on our business. We believe that their expertise will help us compete more effectively. For further details on our Directors and senior management, see “Directors and Senior Management” in this Document. If one or more members of our senior management or our key employees are unable or unwilling to continue their employment with us, we may not be able to replace them with qualified personnel in a timely manner, or at all, which may result in material adverse changes to our established brand image, reputation, service quality or standards, and in turn, may disrupt our business and materially and adversely affect our business, financial condition and results of operations.

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We are exposed to risks associated with failing to detect and prevent fraud, negligence or other misconduct committed by our employees, third-party subcontractors or other third parties.

We are exposed to fraud, negligence or other misconduct, intended or unintended, committed by our employees, subcontractors, agents, customers or other third parties that could subject us to financial losses and sanctions imposed by governmental authorities as well as seriously harm our reputation. We cannot assure you that our risk management and internal control systems will always enable us to detect, prevent and take remedial measures in relation to fraud, negligence or other misconduct committed by our employees, third-party subcontractors or other third parties in a timely and effective manner. Examples of such behavior include crimes such as theft, vandalism and bribery during tenders.

Although we have limited control over the behavior of any of these parties, we may be viewed as at least partially responsible for their conduct on contractual or tortious grounds or suffer loss as a result of their misconducts. We may become, or be joined as, a defendant in litigation or other administrative or investigative proceedings and be held accountable for injuries or damages sustained by our customers or other third parties. In the event that we cannot recover related costs from the employees, third-party subcontractors or other third parties involved in the misconducts, our business, financial condition and results of operations could be materially and adversely affected. Such misconducts could also attract negative publicity on our Group, damaging our reputation and brand value.

We may be involved in legal disputes from time to time, which may adversely affect our financial position, divert management attention and harm our reputation.

From time to time, we may be directly or indirectly involved in legal disputes with employees, tenants, subcontractors, regulatory bodies, customers or other third parties. These legal disputes may relate to, contractual warranties, employment, negligence and intellectual property. For example, tenants may bring claims against us for perceived failures (actual or otherwise) to perform in accordance with their expectations as to service quality. Our employees and subcontractors may also sue us for various reasons, including, among others, occupational injuries and employment related disputes. We are subject to risks associated with having limited control over the behavior of employees, subcontractors and other third parties who may accidentally or intentionally harm the interests of our customers. Any claims, disputes and legal proceedings brought against us, with or without merit, could result in substantial costs and divert capital resources and management attention. We may suffer damage to our reputation regardless of whether we prevail, leading to material adverse effects on our business, financial position and brand value.

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Damage to the public areas of our managed properties could adversely affect our business, financial condition and results of operations.

The public areas of the properties under our management may suffer damage as a result of occurrences beyond our control, including but not limited to natural disasters, accidents or intentional harm. According to the Measures for the Management of Special Maintenance of Residential Buildings (《住宅專項維修資金管理辦法》), which was jointly issued by the Ministry of Construction and the MOF on December 4, 2007 and became effective on February 1, 2008, owners of residential properties are required to establish special maintenance funds which is used for maintenance, renewal, transformation of residential common parts, common facilities and equipment. Nevertheless, there is no guarantee that there will be sufficient sums in those special maintenance funds. Where the damage is caused by natural disasters such as earthquakes, floods or typhoons, or accidents or intentional harm such as fires, the damage caused may be extensive. At times additional resources may have to be allocated to assist police and other governmental authorities in investigating criminal actions that may have been involved.

As the property management service provider, we may be viewed as responsible for restoring the public areas and assisting any investigative efforts. In the event that there is any shortfall in the special funds necessary to cover all the costs involved, we may have to compensate for the difference with our own resources first. We would need to collect the amount of the shortfall from the property owners later. To the extent that our attempts are unsuccessful, we may experience material adverse effects on our business, financial condition and results of operations. Although PRC law mandates that property owners shall top-up the special fund once less than 30% of the initial amount of money remains, there is no guarantee that any refill plan proposed would be approved by property owners’ associations or the local housing authority. See “Regulatory Overview – Legal Supervision of Property Management Services and Other Related Services” in this Document for details. As we intend to continue growing our business, the likelihood of such occurrences may rise in proportion to any increases in the number of our managed properties. In addition, we may expand into markets that are geographically located in areas susceptible to earthquakes or typhoons and thereby increase the chances of us being affected by these natural disasters and therefore materially and adversely affect our business, financial condition and results of operations.

Our employees and third-party subcontractors may sustain work injuries during the ordinary course of providing commercial operational and residential property management services.

Work injuries may occur during the ordinary course of our business. For example, repair and maintenance services performed by our employees or subcontractors may involve the handling of tools and machinery that carry the inherent occupational risk of accidents. Hence, we are exposed to risks in relation to work safety, including but not limited to claims for injuries, fatal or otherwise, sustained by our employees and third-party subcontractors. Such occurrences may also damage our reputation within the commercial operational and residential property management service market. We may also experience business disruptions and be

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Some of our lease agreements have not been filed with the relevant PRC authorities and, as a result, we might be subject to administrative fines.

During the Track Record Period, we leased properties in various locations in the PRC for use primarily as office spaces, canteens and employee dormitories. As of the Latest Practicable Date, we had not completed the administrative filings of nine lease agreements relating to properties we leased. According to applicable PRC regulations, the lessor and the lessee of a lease agreement are required to file the lease agreement with relevant governmental authorities within 30 days after the execution of the lease agreement. If the filing is not made, the governmental authorities may require that the filing be made within a stated period of time, failing which they may impose a fine ranging from RMB1,000 to RMB10,000 for each agreement that has not been properly filed. According to applicable PRC regulations, lessors of the related leases need to provide us with certain documents (such as their business licenses or identification information) in order to complete the administrative filing. There can be no assurance that the lessors of our leased properties will be cooperative in the process of completing the filings. If we fail to complete the administrative filings within the period required by the relevant governmental authorities and relevant authorities determine that we shall be liable for failing to complete the administrative filings of all the relevant lease agreements, we might be subject to fines. See “Business – Properties”.

We may fail or experience material delays to obtain or renew required permits, licenses, certificates or other relevant PRC governmental approvals necessary for our business operations.

We are required to obtain governmental approvals in the form of permits, licenses and certificates to provide our commercial operational and residential property management services. Generally, they are only issued or renewed after certain conditions have been satisfied. We cannot assure you that we will not encounter obstacles toward fulfilling such conditions that delay us in obtaining or renewing, or result in our failure to obtain or renew, the required governmental approvals. In addition, the PRC Government and relevant authorities may promulgate new policies in relation to the conditions for issuance or renewal from time to time. We cannot guarantee that such new policies will not present unexpected obstacles toward our ability to obtain or renew the required permits, licenses and certificates or that we will be able to overcome these obstacles in a timely manner, or at all. Loss of or failure to obtain or renew our permits, licenses and certificates could result in disruption to our business operations, potentially leading to material adverse effects on our business and results of operations.

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We may fail to comply with the requirements to go through the tender and bidding process when obtaining residential property management service contracts.

According to the relevant PRC laws and regulations, property developers shall engage the residential property management service providers to provide preliminary property management services by going through the tender process, and complete the necessary filing and registration procedures. If a property developer fails to do so, it might be ordered to rectify this non-compliance by competent authorities and imposed a penalty up to RMB100,000. However, there are no specific laws and regulations in the PRC setting out administrative penalties upon residential property management service providers for failing to enter into preliminary management service contracts through a tender and bidding process.

In the event that a property developer fails to undergo the required tender process and administration filing for any of our new preliminary management service contracts in the future and the local government requires the relevant property developer to rectify within a prescribed period, the relevant property developer may need to organize another tender and bidding process to select a residential property management service provider for their projects. In the case that we do not win the tender and bidding, we may not continue our residential property management services for the relevant projects and, as a result, our revenue and business may be negatively impacted.

Brands are our key assets and affect how we are perceived in the market. Any inappropriate use of any of “R&F (富力)” or related trade names or trademarks and deterioration in the “R&F (富力)” brand image could adversely affect our business.

Brands are our key assets. We provide residential and commercial property management services under the trade name of “R&F (富力)”. Our ability to attract and retain customers is highly dependent upon the external perceptions of our level of service, trustworthiness, business practices, management, workplace culture, financial condition, our response to unexpected events and other subjective qualities. The success of our business depends substantially upon our continued ability to increase brand recognition and further grow brand equity.

As certain trade names such as “R&F (富力)” are shared by us and members of R&F Group, if we or these entities or our or their respective directors, management personnel or other employees take action that damages such brand names or corporate image, or if any material negative publicity is associated with any of them, for example, as a result of regulatory investigations into, or other proceedings involving, wrongdoing or corrupt practices engaged in by any such entity or person, our brand image and reputation as well as our market value may be adversely affected.

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Meanwhile, unauthorized use of our brand names or related trademarks could diminish the value of our brands, market reputation and competitive advantages. Negative perceptions or publicity regarding these matters, even if related to seemingly isolated incidents and whether or not factually correct, could erode trust and confidence and damage our reputation among existing and potential clients, which could make it difficult for us to attract new customers and maintain existing ones.

We believe our continued success depends on our ability to preserve, grow and leverage the value of such brands. The protection of our brands, including related trademarks, may require the expenditure of significant financial and operational resources. Moreover, the steps we take to protect our brands may not adequately protect our rights or prevent third parties from infringing or misappropriating our trademarks. Even when we detect infringement or misappropriation of our trademarks, we may not be able to enforce all such trademarks. Any unauthorized use by third parties of our brands may adversely affect our brands. Furthermore, as we continue to expand our business, there is a risk that we may face claims of infringement or other alleged violations of third-party intellectual property rights, which may restrict us from leveraging our brands in a manner consistent with our business goals.

We may fail to effectively protect our intellectual property rights.

We rely on our trade name and trademarks to build brand value and recognition, which we believe are key to our future growth and for fostering customer loyalty. Unauthorized use or infringement of our trade names or trademarks may impair our brand value and recognition. Third parties may use our intellectual property in ways that damage our reputation in the commercial operational and property management service market. We primarily rely on a combination of copyrights, trademarks and domain name registrations to protect our intellectual property rights. We cannot assure you that our measures to protect our intellectual property will be sufficient and that we will be able to detect all misappropriation or unauthorized use of our trade name and trademarks in a timely manner, or at all. There is also no guarantee that we will be successful in any enforcement proceedings that we undertake. Litigation to protect our intellectual property may be time-consuming, costly and divert management attention from our operations. While experiencing material adverse effects on our business and financial condition, failures to protect our intellectual property rights may also diminish our competitiveness and market share.

We may not be able to provide services through our Zizai Platform.

We utilize our Zizai Platform, which we co-developed with Guangzhou ThinkinPower Internet Technology Co., Ltd. (“ThinkinPower”), as the gateway for our customers to access our services both online and offline with a view to enhancing customer experience and loyalty, as well as our brand recognition. Through the Zizai Platform, we connect property owners and residents of the communities under our management to diversified value-added services and a large pool of resources. However, as ThinkinPower owns the copyright and the source code of Zizai Platform and we are merely licensed to use it, we cannot guarantee you that ThinkinPower will continue to license Zizai Platform to us in the future. In such unlikely circumstance, we will not be able to provide services to our customers through the Zizai Platform, and our ability to stay abreast of consumer preferences as well as our appeal to our customers may diminish, which in turn may adversely affect our business, our results of operations and our financial position.

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Any claims by third parties alleging possible infringement of their intellectual property rights would have a material adverse effect on our business, brand value and reputation.

We may subject to claims from competitors or third parties alleging intellectual property infringement in our ordinary course of business from time to time. Any claims or legal proceedings brought against us in relation to such issues, with or without merit, could result in substantial costs and divert capital resources and management attention. In the event of an adverse determination, we may be compelled to pay substantial damages or to seek licenses from third parties and pay ongoing royalties on unfavorable terms. In addition, regardless of whether we prevail, intellectual property disputes may damage our brand value and reputation in the eyes of current and potential customers and within our industry. As a result, our business, financial condition and results of operations could be materially and adversely affected.

We may be subject to fines for our failure to make full contribution to social insurance fund and housing provident fund for some of our employees.

During the Track Record Period, some of our PRC subsidiaries did not make full contribution to social insurance and housing provident funds for their employees. We made provisions in a total amount of approximately RMB2.5 million, RMB2.5 million, and RMB2.2 million, respectively, in respect of the potential liabilities arising from our non-compliance concerning social insurance and housing provident fund contributions in 2018, 2019, and 2020. As advised by our PRC Legal Advisors, according to the relevant PRC laws and regulations, (i) if we fail to pay the full amount of social insurance contributions as required, the relevant PRC authorities may demand us to pay the outstanding social insurance contributions within a stipulated deadline and we may be liable to a late payment fee equal to 0.05% of the outstanding amount for each day of delay; if we fail to make such payments, we may be liable to a fine from one to three times to the amount of the outstanding contributions; and (ii) in respect of outstanding housing provident fund contributions, we may be ordered to pay the outstanding housing provident fund contributions within a prescribed time period. If the payment is not made within such time limit, an application may be made to PRC courts for compulsory enforcement. See “Business – Legal Proceedings and Compliance – Historical Non-compliance Incidents.”

Fluctuations in amounts of tax benefits or government grants may lead to volatility in our profit.

We enjoy favorable treatment from government authorities in respect of, among other things, tax benefits and government grants to support local corporate and economic development and to encourage our effort of stabilising employment. Certain of our subsidiaries and branches in the PRC are located in Hainan Province and Chongqing Province, which are subject to a preferential income tax rate of 15.0%. Our government grants amounted to RMB0.8 million, RMB4.4 million, and RMB6.7 million, respectively, for 2018, 2019, and 2020. Tax benefits and government grants fluctuated during the Track Record Period because such benefits and grants were subject to the government policy in that year or period. There can be no assurance that we will continue to receive significant amounts of tax benefits or government grants, or at all. Accordingly, we may experience additional fluctuations in our tax benefits and government grants, which may lead to volatility in our profit.

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We may not be able to recover our deferred tax assets.

In the application of our accounting policies, our management is required to make judgments, estimates and assumptions about the carrying amounts of certain assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Therefore, actual results may differ from these accounting estimates. Our deferred tax assets amounted to RMB101.8 million, RMB86.9 million and RMB64.7 million, respectively, as of December 31, 2018, 2019, and 2020.

Based on our accounting policies, we recognize deferred tax assets relating to certain temporary differences and tax losses when our management considers it is probable that future taxable profit will be available and as a result, the temporary differences or tax losses can be utilized. The outcome of the actual utilization of such temporary differences or tax losses may be different. If there is a significant adverse change in our performance, some or all of the relevant deferred tax assets may need to be written-off and charged to the income statement, which could have an adverse effect on our financial condition. Moreover, utilization of deferred tax assets significantly depends on our management’s judgment as to whether sufficient profits or taxable temporary differences will be available in the future.

We recorded accumulated losses during the Track Record Period.

We recorded accumulated losses of approximately RMB366.8 million, RMB403.0 million and RMB179.7 million, respectively, as of December 31, 2018, 2019 and 2020, which was primarily due to (i) the relatively low property management fees and the relatively high labor cost and maintenance costs of these loss-making properties; and (ii) the free property management services that we provided with respect to certain unsold property units before the Track Record Period as we provided property management services to certain properties developed by R&F Group as a functional subsidiary. We may record losses again in the future, which may in turn reduce our retained earnings, materially and adversely affect our profitability, financial condition, results of operations as well as our ability to pay dividends to our Shareholders.

We recorded net current liabilities during the Track Record Period, and we may be subject to liquidity risks accordingly.

We had net current liabilities of RMB468.3 million, RMB210.0 million and RMB249.5 million, respectively, as of December 31, 2018, 2019 and 2020. For details, see “Financial Information – Net Current Liabilities.” Going forward, there can be no assurance that we will not continue to have net current liabilities that would expose us to liquidity risk. If we continue to have net current liabilities, our working capital for business operations may be constrained, and our business, financial condition and results of operations may be materially and adversely affected.

Our insurance coverage may not sufficiently cover the risks related to our business.

We purchase and maintain insurance policies that we believe are customary with the standard commercial practice in our industry and as required under the relevant laws and regulations. For further details on the insurance policies we maintain, see “Business – Insurance” in this Document. However, we cannot assure you that our insurance policies will provide adequate coverage for all the risks in connection with our business operations.

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Consistent with customary practice in the PRC, we do not carry any business interruption insurance or litigation insurance. In addition, insurance policies against disruption or damage caused by instances such as natural disasters, wars, civil unrest and acts of terrorism are not available in the PRC on commercially practicable terms. We may be required to bear our losses to the extent that our insurance coverage is insufficient. If we were to incur substantial losses and liabilities that are not covered by our insurance policies, we could suffer significant costs and diversion of our resources, and thereby materially and adversely affecting our business, financial condition and results of operations.

Our historical results may not be indicative of our future prospects and results of operations.

Although we experienced fast revenue and profit growth during the Track Record Period, we cannot assure you that we can sustain such growth in the future. Our profitability depends partially on our ability to control costs and operating expenses, which may increase as our business expands. There is no guarantee that we will continue to be able to increase the number of our property management service agreements or total GFA under management, nor that we will be able to succeed in our business development efforts going forward. Moreover, we will continue to face challenges related to rising labor and subcontracting costs, and intensive competition for employees and business opportunities. The effects of changing regulatory, economic or other factors beyond our control may also have material adverse effects on our business. Thus, investors should not rely on our historical results of operations to predict our future financial performance.

We are subject to risks beyond our control relating to natural disasters, epidemics, acts of terrorism or wars, and other disasters in the PRC and globally.

Our business is subject to general economic and social conditions in the PRC. The outbreak of any severe diseases in China such as the human swine flu, also known as Influenza A (H1N1), H5N1 avian flu or severe acute respiratory syndrome (“SARS”) or COVID-19, and other natural disasters which are beyond our control may adversely affect the economy, infrastructure and livelihood of the people in the PRC, which in turn may adversely impact domestic consumption and our business. Some regions in the PRC, including certain cities where we operate, are under the threat of flood, earthquake, sandstorm, snowstorm, fire, drought or epidemics. Our business, financial position and results of operations may be materially and adversely affected if natural disasters or other such events occur. China has experienced natural disasters, including earthquakes, floods, landslides and droughts in the past, resulting in deaths of people, significant economic losses and significant and extensive damage to factories, power lines and other properties, as well as blackouts, transportation and communications disruptions and other losses in the affected areas. Furthermore, the PRC reported a number of cases of SARS in 2003. Since its outbreak in 2004, there have been reports on occurrences of avian flu in various parts of the PRC, including several confirmed human cases and deaths. The outbreak of COVID-19 has resulted in numerous confirmed cases and deaths both in China and globally. Any future outbreak of SARS, COVID-19, avian flu or other similar adverse epidemics may, among others, significantly disrupt our business. Any

–67– 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. RISK FACTORS such natural disasters or outbreak of infectious disease may cause a shortage of labor and raw materials, increase cost to our existing property management projects, which would disrupt our operations and have a material adverse impact on our business, financial condition and results of operations. Our operations could also be disrupted if any of our employees were suspected of contracting or contracted an epidemic disease, since this could require us to quarantine some or all of our employees and disinfect the venues for our business operations. Any such natural disasters, public health and public security hazards may materially and adversely affect or disrupt our business operations and may also severely affect and restrict the level of economic activity in the affected areas, which in turn may have a material and adverse effect on our business, financial position and results of operations.

If we are unable to perform our contracts, our results of operations and financial condition may be adversely affected.

As of December 31, 2018, 2019, and 2020, we recorded contract liabilities in the amount of RMB235.1 million, RMB240.1 million and RMB297.4 million, respectively. Our contract liabilities mainly represent property management fees received upfront as of the beginning of a billing cycle but not recognized as revenue. See “Financial Information – Description of Certain Combined Balance Sheets Items – Liabilities – Contract Liabilities.” If we fail to fulfill our obligations under our contracts with customers, we may not be able to convert such contract liabilities into revenue, and our customers may also require us to refund the property management fees we have received upfront, which may adversely affect our cash flow and liquidity condition and our ability to meet our working capital requirements and in turn, our results of operations and financial condition. In addition, if we fail to fulfill our obligations under our contracts with customers, it may also adversely affect our relationship with such customers, which may in turn affect our results of operations in the future.

RISKS RELATING TO DOING BUSINESS IN THE PRC

We are subject to adverse changes in economic, political and social conditions and government policies in the PRC.

A large portion of our major businesses, assets, operations are located in the PRC. Accordingly, our financial condition, results of operations and prospects are, to a significant degree, subject to the economic, political, social and legal conditions in the PRC. The PRC economy differs from that of most developed countries in many respects, including the extent of government involvement, level of economic development, investment control, resource allocation, growth rate and control over foreign exchange. Before its adoption of reform and open-door policies beginning in 1978, the PRC was primarily a planned economy. Since then, the PRC economy has been transitioning to become a market economy with socialist characteristics.

For approximately four decades, the PRC Government has implemented economic reform measures to utilize market forces in the PRC economy. Many of the reform measures are unprecedented or experimental and are likely to be modified from time to time. Other political,

–68– 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. RISK FACTORS economic and social factors may lead to further readjustment or introduction of other reform measures. This reform process and any changes in laws and regulations or the interpretation or implementation thereof in the PRC may have a material impact on our operations or may adversely affect our financial condition and results of operations.

While the PRC economy has grown significantly in recent years, this growth has been geographically uneven among various sectors of the economy and during different periods. We cannot assure you that the PRC economy will continue to grow, or that if there is growth, such growth will be steady and uniform. Any economic slowdown may materially and adversely affect our business. In the past, the PRC Government has periodically implemented a number of measures intended to slow down certain segments of the economy which the PRC Government believed was overheating. We cannot assure you that the various macroeconomic measures and monetary policies adopted by the PRC Government to guide economic growth and allocate resources will be effective in improving the growth rate of the PRC economy. In addition, such measures, even if they benefit the overall PRC economy in the long term, may reduce demand for our services and therefore could materially and adversely affect our business, financial condition and results of operations.

Restrictions on currency exchange under PRC laws and regulations may limit our ability to satisfy obligations denominated in foreign currencies.

The PRC government imposes, in certain cases, controls on the convertibility of Renminbi into foreign currencies and the remittance of currency into or out of China. All of our revenue is denominated in Renminbi. Under our current corporate structure, we derive our income primarily from dividend payments made by our PRC subsidiaries. On one hand, subject to restrictions under PRC law, dividend payments made by our PRC subsidiaries can only be paid out from the distributable profits of our PRC subsidiaries. On the other hand, shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to pay dividends or other payments to us or satisfy other foreign currency-denominated obligations, if any.

Under existing PRC foreign exchange regulations, the Renminbi is convertible without prior approval from the SAFE for current account transactions so long as certain procedures are complied with. Examples of such current account transactions include profit distributions and interest payments. However, prior approval and registration with the SAFE is required for capital account transactions. Examples of capital account transactions include foreign direct investment and the repayment of loan principal. We cannot assure you that the PRC Government, in seeking to regulate the economy, will not restrict access to foreign currencies for current account transactions in the future. Such restrictions may limit our ability to convert cash from our operating activities into foreign currencies to make dividend payments or satisfy any foreign currency-denominated obligations we may have. Moreover, limitations on the flow of funds between us and our PRC subsidiaries may restrict our ability to provide financing to our PRC subsidiaries and take advantage of business opportunities in response to market conditions.

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Fluctuations in exchange rates may have a material adverse impact on your investment.

The exchange rate of the Renminbi fluctuates against the Hong Kong dollar, U.S. dollar and other foreign currencies and is affected by, among other factors, the policies of the PRC Government and changes in international and domestic political and economic conditions. From 1995 to July 20, 2005, the conversion of the Renminbi into foreign currencies was based on fixed rates set by the PBOC. However, effective from July 21, 2005, the PRC Government decided to permit the Renminbi to fluctuate within a regulated band based on market supply and demand and by reference to a basket of currencies. On November 30, 2015, the Executive Board of the International Monetary Fund completed a regular five-year review of the basket of currencies that make up the Special Drawing Right and determined that, effective from October 1, 2016, the Renminbi will be included in the Special Drawing Right basket as a fifth currency along with the U.S. dollar, the Euro, the Japanese yen and the British pound. It is difficult to predict how market forces and the PRC Government’s policies will continue to impact Renminbi exchange rates going forward. In light of the trend towards Renminbi internationalization, the PRC Government may announce further changes to the exchange rate system, and we cannot assure you that the Renminbi will not appreciate or depreciate significantly in value against the Hong Kong dollar, U.S. dollar or other foreign currencies.

All of our revenue and substantially all of our liabilities and assets are denominated in Renminbi, while our proceeds from the [REDACTED] will be denominated in Hong Kong dollars. Material fluctuations in the exchange rate of the Renminbi against the Hong Kong dollar may negatively impact the value and amount of any dividends payable on our Shares. For example, significant appreciation of the Renminbi against the Hong Kong dollar could reduce the amount of Renminbi received from converting [REDACTED] proceeds or proceeds from future financing efforts to fund our operations. Conversely, significant depreciation of the Renminbi may increase the cost of converting our Renminbi-denominated cash flow into Hong Kong dollars, thereby reducing the amount of cash available for paying dividends on our Shares or carrying out other business operations.

Inflation in the PRC could negatively affect our profitability and growth.

Economic growth in the PRC has, in the past, been accompanied by periods of high inflation. In response, the PRC Government has implemented policies from time to time to control inflation, such as restricting the availability of credit by imposing tighter bank lending policies or higher interest rates. The PRC Government may take similar measures in response to future inflationary pressures. Rampant inflation without the PRC Government’s mitigation policies would likely increase our costs, thereby materially reducing our profitability. We cannot assure you that we will be able to pass any additional costs to our customers. On the other hand, such control measures may also lead to slower economic activity and we may see reduced demand for our services.

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Uncertainties with respect to the PRC legal system could limit the legal protection available to you.

The legal system in the PRC has inherent uncertainties that could limit the legal protection available to our Shareholders. As we conduct the majority of our business operations in the PRC, we are principally governed by PRC laws, rules and regulations. The PRC legal system is based on the civil law system. Unlike the common law system, the civil law system is established on the written statutes and their interpretation by the Supreme People’s Court (最高人民法院), while prior legal decisions and judgments have limited significance as precedent. Additionally, such PRC written statutes are often principle-oriented and required detailed interpretations by the enforcement bodies for further application and enforcement. The PRC Government has been learning from the common law system, and has made significant progress in promulgating laws and regulations related to economic affairs and matters, such as corporate organization and governance, foreign investments, commerce, taxation and trade.

However, many of these laws and regulations are relatively new and there is a limited volume of published decisions. Thus, there are uncertainties involved in their implementation and interpretation, which might not be as consistent and predictable as in other jurisdictions. In addition, the PRC legal system is based in part on government policies and administrative rules that may have retroactive effect. Consequently, we may not be aware of any violation of these policies and rules until sometime after such violation has occurred. Furthermore, the legal protection available to you under these laws, rules and regulations may be limited. Any litigation or regulatory enforcement action in the PRC may be protracted and result in substantial costs and diversion of resources and management attention.

You may experience difficulties in effecting service of process or enforcing foreign judgments against us, our Directors or senior management residing in the PRC.

Our Company is incorporated in the Cayman Islands. Substantially all of our assets are located in the PRC and most of our Directors and senior management reside in the PRC. Therefore, it may not be possible to effect service of process within Hong Kong or elsewhere outside of the PRC upon us or our Directors or senior management. Moreover, the PRC has not entered into treaties for the reciprocal recognition and enforcement of court judgments with Japan, the United Kingdom, the United States and many other countries. As a result, recognition and enforcement in the PRC of a court judgment obtained in other jurisdictions may be difficult or impossible.

In addition, Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region Pursuant to Choice of Court Agreements between Parties Concerned (最高人民法院關於內地與香港特別行政區法院相互認可和執行當事人協議管轄的民商事案件判決的安排) or the Arrangement, was promulgated by the Supreme People’s Court on July 3, 2008 and became effective on August 1, 2008. Pursuant to the Arrangement, a party with a final court judgment rendered by a Hong Kong court requiring payment of money in a civil and commercial case pursuant to a choice of court agreement in writing may apply for recognition

–71– 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. RISK FACTORS and enforcement of the judgment in the PRC. Similarly, a party with a final judgment rendered by a PRC court requiring payment of money in a civil and commercial case pursuant to a choice of court agreement in writing may apply for recognition and enforcement of such judgment in Hong Kong. A choice of court agreement in writing is defined as any agreement in writing entered into between the parties after the effective date of the arrangement in which a Hong Kong or PRC court is expressly designated as the court having sole jurisdiction for the dispute. Therefore, it may not be possible to enforce a judgment rendered by a Hong Kong court in the PRC if the parties in dispute do not agree to enter into a choice of court agreement in writing. It may be difficult or impossible for investors to enforce a Hong Kong court judgment against our assets or our Directors or senior management in the PRC.

We may be deemed a PRC resident enterprise under the EIT law and be subject to a tax rate of 25.0% on our global income.

Pursuant to the EIT Law, which came into effect on January 1, 2008 and was amended on February 24, 2017 and December 29, 2018, an enterprise established outside the PRC whose “de facto management body” is located in the PRC is considered a “PRC resident enterprise” and will generally be subject to the uniform enterprise income tax rate, or EIT rate, of 25.0% on its global income. Under the implementation rules of the EIT Law, “de facto management body” is defined as the organizational body that effectively exercises management and control over such aspects as the business operations, personnel, accounting and properties of the enterprise.

On April 22, 2009, the SAT released the Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies (《關於境外註冊中資控股企業依據實際管理機構標準認定為居民企業有關問題的通知》) or Circular 82, as amended on January 29, 2014 and December 29, 2017, which sets out the standards and procedures for determining whether the “de facto management body” of an enterprise registered outside of the PRC and controlled by PRC enterprises or PRC enterprise groups is located within the PRC. Under Circular 82, a foreign enterprise controlled by a PRC enterprise or PRC enterprise group is considered a PRC resident enterprise if all of the following apply: (i) the senior management and core management departments in charge of daily business operations are located mainly within the PRC; (ii) financial and human resources decisions are subject to determination or approval by persons or bodies in the PRC; (iii) major assets, accounting books, company seals and minutes and files of board and shareholders’ meetings are located or kept within the PRC; and (iv) at least half of the enterprise’s directors with voting rights or senior management reside within the PRC. In addition, Circular 82 also requires that the determination of “de facto management body” shall be based on the principle that substance is more important than form. Further to Circular 82, SAT issued the Chinese-Controlled Offshore Incorporated Resident Enterprises Income Tax Regulation (Trial Implementation) (《境外註冊中資控股居民企業所得稅管理辦法 (試行)》) or Bulletin 45, which took effect on September 1, 2011 and was amended on June 1, 2015, October 1, 2016 and June 15, 2018, to provide more guidance on the implementation of Circular 82 and clarify the reporting and filing obligations of such “Chinese-controlled offshore incorporated resident enterprises.” Bulletin 45 provides procedures and administrative

–72– 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. RISK FACTORS details for the determination of resident status and administration of post-determination matters. Although Circular 82 and Bulletin 45 explicitly provide that the above standards apply to enterprises which are registered outside of the PRC and controlled by PRC enterprises or PRC enterprise groups, Circular 82 may reflect the SAT’s criteria for determining the tax residence of foreign enterprises in general. All members of our senior management are currently based in the PRC. If we are deemed a PRC resident enterprise, the EIT rate of 25% on our global taxable income may reduce capital we could otherwise divert to our business operations.

You may be subject to PRC income tax on dividends from us or on any gain realized on the transfer of our Shares under PRC laws.

Under the EIT Law and its implementation rules, subject to any applicable tax treaty or similar arrangement between the PRC and your jurisdiction of residence that provides for a different income tax arrangement, PRC withholding tax at the rate of 10% is normally applicable to dividends from PRC sources payable to investors that are non-PRC resident enterprises, which do not have an establishment or place of business in the PRC, or which have such establishment or place of business if the relevant income is not effectively connected with the establishment or place of business. Any gains realized on the transfer of shares by such investors are subject to a 10% PRC income tax rate if such gains are regarded as income from sources within the PRC unless a treaty or similar arrangement provides otherwise. Under the PRC Individual Income Tax Law (《中華人民共和國個人所得稅法》) and its implementation rules, dividends from sources within the PRC paid to foreign individual investors who are not PRC residents are generally subject to a PRC withholding tax at a rate of 20% and gains from PRC sources realized by such investors on the transfer of shares are generally subject to a 20% PRC income tax rate, in each case, subject to any reduction or exemption set forth in applicable tax treaties and PRC laws.

Although the majority of our business operations are in the PRC, it is unclear whether dividends we pay with respect to our Shares, or the gain realized from the transfer of our Shares, would be treated as income from sources within the PRC and as a result be subject to PRC income tax if we are considered a PRC resident enterprise. If PRC income tax is imposed on gains realized from the transfer of our Shares or on dividends paid to our non-PRC resident investors, the value of your investment in our Shares may be materially and adversely affected. Furthermore, our Shareholders whose jurisdictions of residence have tax treaties or arrangements with the PRC may not qualify for benefits under such tax treaties or arrangements.

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PRC regulations of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of the [REDACTED] to make loans or additional capital contributions to our PRC subsidiaries.

Since we are an offshore holding company, we will need to make capital contributions and loans to our PRC subsidiaries or through loans to our consolidated affiliated entities such that the net proceeds of this [REDACTED] can be used in the manner described above. Such capital contributions and loans are subject to a number of limitations and approval processes under PRC laws and regulations. Under PRC laws and regulations, the PRC governmental authorities are required to process such approvals or registrations or deny our application within a prescribed period, which are usually less than 90 days. The actual time that it takes, however, may be longer due to administrative delay. We cannot assure you that we can obtain the approvals from the relevant governmental authorities, or complete the registration and filing procedures required to use our net proceeds as described above, in each case on a timely basis, or at all. This is because PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of this [REDACTED] to make loans or additional capital contributions to our PRC operating subsidiaries or consolidated affiliated entities, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

Regulations relating to offshore investment activities by PRC residents may subject us to fines or sanctions imposed by the PRC government, including restrictions on the ability of our PRC subsidiaries to pay dividends or make distributions to us and our ability to increase our investment in our PRC subsidiaries.

The SAFE promulgated the Circular of the SAFE on Issues concerning Foreign Exchange Administration of the Overseas Investment and Financing and the Round-tripping Investment Made by Domestic Residents through Special-Purpose Companies (《國家外匯管理局關於境內居民通過特殊目的公司境外投融資及返程投資外匯管理有關問題的通知》) or Circular 37, in July 2014, which abolished and superseded the Circular on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents to Engage in Financing and Round Trip Investment via Overseas Special Purpose Vehicles (《關於境內居民通過境外特殊目的公司融資及返程投資外匯管理有關問題的通知》). Pursuant to Circular 37 and its implementation rules, PRC residents, including PRC institutions and individuals, must register with local branches of the SAFE in connection with their direct or indirect offshore investments in an overseas special purpose vehicle, or SPV, directly established or indirectly controlled by PRC residents for the purposes of offshore investment and financing with their legally owned assets or interests in domestic enterprises, or their legally owned offshore assets or interests or any inbound investment through SPVs. Such PRC residents are also required to amend their registrations with SAFE when there is change to the required information of the registered SPV, such as changes to its PRC resident individual shareholder, name, operation period or other basic information, or the PRC individual resident’s increase or decrease in its capital contribution in the SPV, or any share transfer or exchange, merger or division of the SPV. In accordance with the Notice of the SAFE on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment (《國家外匯管理局關於進一步簡化和

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改進直接投資外匯管理政策的通知》), the foreign exchange registration aforesaid has been directly reviewed and handled by banks since June 1, 2015, and the SAFE and its branches perform indirect regulation over such foreign exchange registration through local banks. Under this regulation, failure to comply with the registration procedures set forth in Circular 37 may result in restrictions being imposed on the foreign exchange activities of our PRC subsidiaries, including the payment of dividends and other distributions to its offshore parent or affiliate, the capital inflow from the offshore entities and its settlement of foreign exchange capital, and may also subject the relevant onshore company or PRC residents to penalties under PRC foreign exchange administration regulations.

We are committed to complying with and ensuring that our Shareholders who are subject to the regulations will comply with the relevant rules. Any future failure by any of our Shareholders who is a PRC resident, or controlled by a PRC resident, to comply with relevant requirements under this regulation could subject us to penalties or sanctions imposed by the PRC Government. However, we may not at all times be fully aware or informed of the identities of all of our Shareholders who are PRC residents, and we may not always be able to timely compel our Shareholders to comply with the requirements of Circular 37. Moreover, we cannot assure you that the PRC Government will not have a different interpretation of the requirements of Circular 37 in the future.

PRC laws and regulations establish more complex procedures for some acquisitions of PRC companies by foreign investors, which could make it difficult for us to pursue growth through acquisitions in the PRC.

A number of PRC laws and regulations, including the M&A Rules, the Anti-Monopoly Law (《反壟斷法》), and the Rules of the MOFCOM on Implementation of Security Review System of Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (《商務部實施外國投資者併購境內企業安全審查制度的規定》) promulgated by the MOFCOM on August 25, 2011 and effective from September 1, 2011 or the Security Review Rules, have established procedures and requirements that are expected to make the review of certain merger and acquisition activities by foreign investors in the PRC more time-consuming and complex. These include requirements in some instances to obtain approval from local offices of the MOFCOM in advance of any transaction in which foreign investors take control of a PRC domestic enterprise, or to obtain approval from the MOFCOM before overseas companies established or controlled by PRC enterprises or residents acquire affiliated domestic companies. PRC laws and regulations also require certain merger and acquisition transactions to be subject to merger control or security review.

The Security Review Rules prohibits foreign investors from bypassing the security review requirement by structuring transactions through proxies, trusts, indirect investments, leases, loans, control through contractual arrangements or offshore transactions. If we are found to be in violation of the Security Review Rules and other PRC laws and regulations with respect to merger and acquisition activities in the PRC, or fail to obtain any of the required approvals, the relevant regulatory authorities would have broad discretion in dealing with such violations, including levying fines, revoking business and operating licenses, confiscating our income and

–75– 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. RISK FACTORS requiring us to restructure or unwind our restructuring activities. Any of these actions could cause significant disruption to our business operations and could materially and adversely affect our business, financial condition and results of operations. Furthermore, if the business of any target company we plan to acquire falls into the ambit of security review, we may not be able to successfully acquire such company either by equity or asset acquisition, capital contribution or any contractual arrangement. We may grow our business in part by acquiring other companies operating in our industry. Complying with the requirements of the relevant regulations to complete such transactions could be time-consuming, and any required approval processes, including approval from the MOFCOM, may delay or inhibit our ability to complete such transactions, thus affecting our ability to expand our business or maintain our market share.

We are subject to the regulatory environment and measures affecting the PRC property management and real estate industries.

Our operations are affected by the regulatory environment and measures affecting the property management industry in the PRC. In particular, the fees that property management companies may charge in connection with property management services are subject to regulation and supervision by relevant regulatory authorities in the PRC. As of December 31, 2018, 2019 and 2020, our numbers of projects that were subject to government guidance price were 153, 181 and 231, respectively, with an aggregate GFA under management of 29.2 million sq.m., 34.9 million sq.m. and 42.9 million sq.m., respectively, contributing to aggregate revenue of RMB499.7 million, RMB571.5 million and RMB712.4 million in 2018, 2019 and 2020, respectively, which accounted for 64.7%, 60.9% and 63.4% of our total revenue from basic property management services to residential properties during the same periods, respectively. For example, the relevant price administration department and construction administration department of the State Council are jointly responsible for the supervision over and administration of fees charged in relation to property management services for preliminary property management service contracts and such fees may need to follow PRC government guidance prices. Although government-imposed price controls on property management fees may continue to relax over time pursuant to the Circular of the National Development and Reform Commission on Relaxing Price Controls in Certain Services (國家發展改革委關於放開部分服務價格意見的通知)(發改價格[2014]2755號), which became effective on 17 December 2014, the property management fees we charge, such as those for preliminary property management service contracts, may still need to follow guidance prices imposed by local governments in different regions in China.

In addition, if the property management fees we charge are not ratified by the relevant PRC authorities or otherwise not in compliance with the relevant requirements for government guidance prices, we may be subject to applicable administrative penalties and our property management fees in excess of the guidance price may be confiscated by the relevant PRC authorities. Government-imposed limits and other regulatory requirement on property management fees could have a negative impact on our earnings. We cannot guarantee that the government regulations on property management fees and other matters concerning the property management industry will not have an adverse effect on our business, financial

–76– 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. RISK FACTORS condition and results of operations, which may be material. In addition, as we expand our business operations into new geographic regions and broaden the range of services we perform, we are subject to an increasing number of provincial and local rules and regulations for various aspects of our business operations. As the size and scope of our operations had increased during the Track Record Period, the difficulty of ensuring compliance with the various local property management regulations and the potential for loss resulting from non-compliance have increased. If we fail to comply with the related local regulations, we may be subject to penalties by the competent PRC authorities. The laws and regulations applicable to our business, whether national, provincial or local, may also change in ways that materially increase our costs of compliance, and any failure to comply could result in significant financial penalties which could have a material adverse effect on our reputation, business, financial position and results of operations.

Moreover, we may also be affected by the PRC government regulations on the real estate industry. The PRC government had in the past introduced various restrictive measures to discourage speculation in the real estate market and has exerted considerable direct and indirect influence on the development of the PRC real estate industry by imposing industry policies and other economic measures, such as control over the supply of land for property development, control of foreign exchange, real estate financing and taxation. Through these policies and measures, the PRC government may restrict or reduce property development activities, place limitations on the ability of commercial banks to make loans to property purchasers, impose additional taxes and levies on property sales and affect the delivery schedule and occupancy rates of the properties we service. Any such governmental regulations and measures may affect the PRC real estate industry, thus limiting our business growth and resulting in a material adverse effect on our business, financial position and results of operations. In particular, the PRC government may introduce other initiatives or implement more stringent measures in the future, such as setting caps on certain debt ratios, with a view to controlling the increase of the debt levels in the real estate sector. Such potential initiatives or measures, once in place, may further limit property developers’ access to capital and slow down the overall growth of the real estate sector and expansion of property developers, including R&F Group, which may in turn negatively impact the growth of the property management industry and the supply of new properties for management by property management companies like us. Furthermore, any economic slowdown, recession or other developments in the social, political, economic or legal environment of the PRC could result in fewer new property development projects, or a decline in the purchasing power of residents or tenants of the properties we manage, resulting in lower demand for our services and lower revenue for us. As such, our business, financial condition and results of operations could be materially and adversely affected.

–77– 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. RISK FACTORS

RISKS RELATING TO THE [REDACTED]

There has been no prior market for our Shares, and their liquidity and market price following the [REDACTED] may be volatile.

Priortothe[REDACTED], there was no public market for our Shares. The indicative [REDACTED] range and the [REDACTED] will be determined by negotiations between us and the [REDACTED] (on behalf of the [REDACTED]), and they may differ significantly from the market price of our Shares following the [REDACTED].

We have applied to [REDACTED] and deal in our Shares on the Stock Exchange. However, even if approved, there can be no guarantee that: (i) an active or liquid trading market for our Shares will develop; or (ii) if such a trading market does develop, it will be sustained following completion of the [REDACTED]; or (iii) the market price of our Shares will not decline below the [REDACTED]. The trading volume and price of our Shares may be subject to significant volatility in response to, among others, the following factors:

• variations in our financial condition and/or results of operations;

• changes in securities analysts’ estimates of our financial condition and/or results of operations, regardless of the accuracy of information on which their estimates are based;

• changes in investors’ perception of us and the investment environment generally;

• loss of visibility in the markets due to lack of regular coverage of our business;

• strategic alliances or acquisitions;

• potential litigations or regulatory investigations;

• loss of key personnel;

• changes in laws and regulations that impose limitations on our industry;

• announcements made by us or our competitors;

• changes in pricing adopted by us or our competitors;

• the liquidity of the market for our Shares; and

• general economic and other factors.

Potential investors will experience immediate and substantial dilution as a result of the [REDACTED] and could face dilution as a result of future equity financings.

The [REDACTED] substantially exceeds the per Share value of our net tangible assets after subtracting our total liabilities, and therefore potential investors will experience immediate dilution when they purchase our Shares in the [REDACTED]. If we were to distribute our net tangible assets to our Shareholders immediately following the [REDACTED], potential investors would receive less than the amount they paid for their Shares.

–78– 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. RISK FACTORS

We will comply with Rule 10.08 of the Listing Rules, which specifies that no further Shares or other securities of the Company (subject to certain exceptions) may be issued or form the subject of any agreement to such an issue within six months from the [REDACTED]. However, after six months from the [REDACTED] we may raise additional funds to finance future acquisitions or expansions of our business operations by issuing new Shares or other securities of the Company. As a result, the percentage shareholding of the then Shareholders may be diluted and such newly issued Shares or other securities may confer rights and privileges that have priority over those of the then Shareholders.

Future or perceived sales of substantial amounts of our Shares could affect their market price.

The market price of our Shares could decline as a result of future sales of substantial amounts of our Shares or other related securities, or the perception that such sales may occur. Our ability to raise future capital at favorable times and prices may also be materially and adversely affected. Our Shares held by the Controlling Shareholders are currently subject to certain lock-up undertakings, see “[REDACTED]” in this Document. However, we cannot assure you that following the expiration of the lock-up periods, these Shareholders will not dispose of any Shares. We cannot predict the effect of any future sales of the Shares by any of our Shareholders on the market price of our Shares.

We may not declare dividends on our Shares in the future.

Any declaration of dividends will be proposed by our Board of Directors, and the amount of any dividends will depend on various factors, including, without limitation, our results of operations, financial condition, capital requirements and surplus, contractual restrictions, future prospects and other factors which our Board of Directors may determine are important. See “Financial Information – Dividend Policy” in this Document for details. We cannot guarantee when, if and in what form dividends will be paid. Our historical dividend policy should not be taken as indicative of our dividend policy in the future.

Investors may experience difficulties in enforcing their Shareholder rights under Cayman Islands law as the protection afforded to minority shareholders under Cayman Islands law may be different from that under the laws of Hong Kong or other jurisdictions.

The Company is incorporated in the Cayman Islands and its affairs are governed by its Memorandum, Articles, the Cayman Islands Companies Act and the common law of the Cayman Islands. The rights of our Shareholders to take action against our Directors, the rights of minority shareholders to instigate actions and the fiduciary responsibilities of our Directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The laws of the Cayman Islands relating to the protection of the interest of minority shareholders may differ from those of Hong Kong or those of other jurisdictions where investors may be located. As a result, minority Shareholders may not enjoy the same rights as those afforded under the laws of Hong Kong or in other jurisdictions. A summary of

–79– 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. RISK FACTORS the company law of the Cayman Islands on protection of minority shareholders is set out in “Appendix III – Summary of the Constitution of the Company and Cayman Islands Companies Act – Cayman Islands Company Law.”

Our Controlling Shareholders have substantial influence over the Company and their interests may not be aligned with the interests of Shareholders who subscribe for Shares in the [REDACTED].

Immediately after the [REDACTED], our Controlling Shareholders will directly or indirectly control the exercise of approximately [REDACTED]% of voting rights in the general meeting of the Company. For further details, see “Relationship with Controlling Shareholders” in this Document. The interests of our Controlling Shareholders may differ from the interests of our other Shareholders. Our Controlling Shareholders will have significant discretion as to how to use the net proceeds from the [REDACTED], which our Shareholders may not necessarily agree with. Our Controlling Shareholders will also have significant influence on the outcome of any corporate transaction or other matters submitted to our Shareholders for approval, including mergers, consolidations, sales of all or substantially all of our assets, election of Directors and other significant corporate actions. This concentration of ownership may discourage, delay or prevent changes in control of the Company that would otherwise benefit our other Shareholders. To the extent that the interests of our Controlling Shareholders conflict with those of our other Shareholders, our other Shareholders may be deprived of opportunities to advance or protect their interests.

Our management has significant discretion as to how to use the net proceeds received by our Company from the [REDACTED], and you may not necessarily agree on how we use them.

Our management has significant discretion as to how to use the net proceeds from the [REDACTED], and you may not necessarily agree on how we use them. Our management may use the net proceeds from the [REDACTED] in ways that you may not agree with or that do not yield a favorable return to our Shareholders. By investing in our Shares, you are entrusting your funds to our management, upon whose judgment you must depend, for the specific uses we will make of the net proceeds received by our Company from this [REDACTED]. For more information, see “Future Plans and Use of Proceeds” of this Document.

Since there will be a gap of several days between the pricing and trading of our [REDACTED], the price of our [REDACTED] could fall below the [REDACTED] when trading commences.

The [REDACTED] of our Shares will be determined on the [REDACTED], which is expected to be on or around [REDACTED]. However, our Shares will not commence trading on the Stock Exchange until the [REDACTED], which is expected to be [REDACTED]. Accordingly, investors may not be able to sell or deal in our Shares during the period between

–80– 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. RISK FACTORS the [REDACTED] and the [REDACTED]. Our Shareholders are subject to the risk that the price of our Shares could fall before trading begins, as a result of adverse market conditions or other adverse developments that could occur between the [REDACTED] and the [REDACTED].

We cannot guarantee the accuracy of facts, forecasts and statistics with respect to the PRC, the PRC economy and our relevant industries contained in this Document.

Certain facts, forecasts and statistics in this Document relating to the PRC, the PRC economy and industries relevant to us were obtained from information provided or published by PRC Government agencies, industry associations, independent research institutions or other third-party sources, and we can guarantee neither the quality nor reliability of such source materials. They have not been prepared or independently verified by us, the Joint Sponsor, the [REDACTED], the [REDACTED], the [REDACTED] and the [REDACTED] or any of its or their respective affiliates or advisors. Therefore, we make no representation as to the accuracy of such facts, forecasts and statistics, which may not be consistent with other information compiled within or outside of the PRC. Due to possibly flawed or ineffective collection methods or discrepancies between published information and market practice, the statistics herein may be inaccurate or incomparable to statistics produced for other economies and should not be relied upon. Furthermore, we cannot assure you that they are stated or compiled on the same basis, or with the same degree of accuracy, as similar statistics presented elsewhere. In all cases, investors should consider how much weight or importance they should attach to or place on such facts, forecasts or statistics.

Forward-looking statements contained in this Document are subject to risks and uncertainties.

This Document contains certain forward-looking statements and information relating to us that are based on the beliefs of our management as well as assumptions made by and information currently available to our management. When used in this Document, the words “aim,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “going forward,” “intend,” “ought to,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would” and similar expressions, as they relate to our Company or our management, are intended to identify forward-looking statements. Such statements reflect the current views of our management with respect to future events, business operations, liquidity and capital resources, some of which may not materialize or may change. These statements are subject to certain risks, uncertainties and assumptions, including the other risk factors as described in this Document. Subject to the ongoing disclosure obligations of the Listing Rules or other requirements of the Stock Exchange, we do not intend publicly to update or otherwise revise the forward-looking statements in this Document, whether as a result of new information, future events or otherwise. Investors should not place undue reliance on such forward-looking statements and information.

–81– 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. RISK FACTORS

Investors should read this entire Document carefully and should not consider or rely on any particular statements in this Document or in published media reports without carefully considering the risks and other information in this Document.

Prior or subsequent to the publication of this Document, there has been or may be press and media coverage regarding us and the [REDACTED], in addition to marketing materials we published in compliance with the Listing Rules. Such press and media coverage may include references to information that do not appear in this Document or is inaccurate. We have not authorized the publication of any such information contained in unauthorized press and media coverage. Therefore, we make no representation as to the appropriateness, accuracy, completeness or reliability of any information disseminated in the media and do not accept any responsibility for the accuracy or completeness of any financial information or forward- looking statements contained therein. To the extent that any of the information in the media is inconsistent or conflicts with the contents of this Document, we expressly disclaim it. Accordingly, prospective investors should only rely on information included in this Document and not on any of the information in press articles or other media coverage in deciding whether or not to purchase the [REDACTED].

–82– 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. INFORMATION ABOUT THIS DOCUMENT AND THE [REDACTED]

[REDACTED]

–83– 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. INFORMATION ABOUT THIS DOCUMENT AND THE [REDACTED]

[REDACTED]

–84– 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. INFORMATION ABOUT THIS DOCUMENT AND THE [REDACTED]

[REDACTED]

–85– 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. INFORMATION ABOUT THIS DOCUMENT AND THE [REDACTED]

[REDACTED]

–86– 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. DIRECTORS AND PARTIES INVOLVED IN THE [REDACTED]

DIRECTORS

Name Address Nationality

Executive Directors

Wang Heng (王珩) Room 1505 Chinese No. 49, Jiaochang East Road Yuexiu District Guangzhou Guangdong Province PRC

Hu Jie (胡傑) No. 24, Shuiyin Road Chinese Yuexiu District Guangzhou Guangdong Province PRC

Non-executive Directors

Li Sze Lim (李思廉) 8/F, OPUS, 53 Stubbs Road Chinese Mid Levels Hong Kong

Zhang Li (張力) 3 Xing An Road, Pearl River Chinese New City Tianhe District Guangzhou Guangdong Province PRC

Independent Non-executive Directors

Zheng Ercheng (鄭爾城) Room 1302, 2nd Ti, Building 1 Chinese Xinghewan Peninsula Shaxi Avenue Panyu District Guangzhou Guangdong Province PRC

–87– 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. DIRECTORS AND PARTIES INVOLVED IN THE [REDACTED]

Zhang Yucong (張宇聰) Room 302, Building 5 Chinese Furong, Huachengyuan Datong Road Guangzhou Guangdong Province PRC

Xin Zhu (辛珠) Flat A, 15/F, Tower 2 Chinese The Harbourside 1 Austin Rd, West Kowloon Hong Kong

Please refer to “Directors and Senior Management” for further details of our Directors and senior management members.

–88– 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. DIRECTORS AND PARTIES INVOLVED IN THE [REDACTED]

PARTIES INVOLVED IN THE [REDACTED]

Joint Sponsors ABCI Capital Limited 11/F, Agricultural Bank of China Tower 50 Connaught Road Central Central Hong Kong

China International Capital Corporation Hong Kong Securities Limited 29/F, One International Finance Centre 1 Harbour View Street Central Hong Kong

[REDACTED]

–89– 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. DIRECTORS AND PARTIES INVOLVED IN THE [REDACTED]

[REDACTED]

Legal advisors to the Company As to Hong Kong law: Sidley Austin Level 39 Two International Finance Centre 8 Finance Street Central Hong Kong

As to PRC law: Commerce & Finance Law Offices 6th Floor, NCI Tower A12 Jianguomenwai Avenue Chaoyang District Beijing PRC

As to Cayman Islands law: Walkers (Hong Kong) 15/F, Alexandra House 18 Chater Road Central Hong Kong

Legal advisors to the Joint Sponsors and As to Hong Kong law: [REDACTED] Ashurst Hong Kong 11/F, Jardine House 1 Connaught Place Central Hong Kong

–90– 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. DIRECTORS AND PARTIES INVOLVED IN THE [REDACTED]

As to PRC law: DeHeng Law Offices 12/F Tower B, Focus Place 19 Finance Street Beijing PRC

Auditor and reporting accountant PricewaterhouseCoopers Certified Public Accountants Registered Public Interest Entity Auditor 22/F, Prince’s Building Central Hong Kong

Industry consultants China Index Academy Tower A, No. 20 Guogongzhuang Middle Street, Fengtai District Beijing PRC

[REDACTED]

–91– 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. WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES

In preparation for the [REDACTED], our Group has sought the following waivers from strict compliance with the relevant provisions of the Listing Rules.

MANAGEMENT PRESENCE IN HONG KONG

Pursuant to Rule 8.12 of the Listing Rules, an issuer must have a sufficient management presence in Hong Kong, which normally means that at least two of its executive directors must be ordinarily resident in Hong Kong. We do not have a sufficient management presence in Hong Kong for the purpose of satisfying the requirement under Rule 8.12 of the Listing Rules. As our headquarters and principal business operations are located in the PRC, our management is best able to attend to its function by being based in the PRC. We have applied to the Stock Exchange for, and the Stock Exchange [has granted] us, a waiver from strict compliance with Rule 8.12 of the Listing Rules subject to, among others, the following conditions:

(a) pursuant to Rule 3.05 of the Listing Rules, we have appointed two authorized representatives, Mr. Hu Jie, our executive Director, vice chairperson of the Board and president, and Ms. Mak Po Man Cherie (“Ms. Mak”), our joint company secretary, who will act as our Company’s principal channel of communication with the Stock Exchange. Ms. Mak is ordinarily resident in Hong Kong. Although Mr. Hu Jie resides in the PRC, he possesses valid travel documents and is able to renew such travel documents when they expire to travel to Hong Kong. Each of our authorized representatives will be available to meet with the Stock Exchange in Hong Kong within a reasonable time frame upon the request of the Stock Exchange and will be readily contactable by telephone, facsimile and/or email. Each of our authorized representatives is authorized to communicate on our behalf with the Stock Exchange. Our Company has been registered as a non-Hong Kong company under Part 16 of the Companies Ordinance and Ms. Mak has also been authorized to accept service of legal process and notices in Hong Kong on behalf of our Company;

(b) both of our authorized representatives have means to contact all our Directors (including our independent non-executive Directors) promptly at all times as and when the Stock Exchange wishes to contact our Directors for any matters. Our Directors who are not ordinarily resident in Hong Kong possess or can apply for valid travel documents to visit Hong Kong and will be able to meet with the Stock Exchange within a reasonable period of time, when required. Each of our Directors has provided his/her mobile phone number, fax number and/or email address to our authorized representatives. In the event that a Director expects to travel, he/she will provide the phone number of the place of his/her accommodation to our authorized representatives or maintain an open line of communication via his/her mobile phone. Each of our Directors and authorized representatives have also provided his/her mobile phone number, office phone number, fax number and/or email address to the Stock Exchange;

–92– 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. WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES

(c) pursuant to Rule 3A.19 of the Listing Rules, we have appointed Maxa Capital Limited as our compliance advisor, which shall have access at all times to our authorized representatives, Directors, senior management and other officers of our Company, and will act as an additional channel of communication between the Stock Exchange and us; and

(d) meetings between the Stock Exchange and our Directors could be arranged through our authorized representatives or the compliance advisor, or directly with our Directors within a reasonable time frame. Our Company will promptly inform the Stock Exchange of any changes of our authorized representatives and/or the compliance advisor.

JOINT COMPANY SECRETARIES

According to Rules 3.28 and 8.17 of the Listing Rules and the Guidance on experience and qualification requirement of a company secretary (HKEX-GL108-20), the secretary of our Company must be a person who has the requisite knowledge and experience to discharge the functions of the company secretary and is either (i) a member of the Hong Kong Institute of Chartered Secretaries, a solicitor or barrister as defined in the Legal Practitioners Ordinance (Chapter 159 of the Laws of Hong Kong) or a certified public accountant as defined in the Professional Accountants Ordinance (Chapter 50 of the Laws of Hong Kong); or (ii) an individual who, by virtue of his/her academic or professional qualifications or relevant experience, is, in the opinion of the Stock Exchange, capable of discharging the functions of company secretary.

We have appointed Mr. Li Wenchang and Ms. Mak as our joint company secretaries. Our Directors are of the view that, having regard to Mr. Li Wenchang’s thorough understanding of the corporate governance of our Group, he is therefore considered as a suitable person to act as a company secretary of our Company. In addition, as our headquarters and principal business operations are located in the PRC, our Directors believe that it is necessary to appoint Mr. Li Wenchang as a company secretary, whose presence in the PRC enables him to attend to the day-to-day corporate secretarial matters concerning our Group. However, Mr. Li Wenchang does not possess a qualification stipulated in Rule 3.28 of the Listing Rules, and thus he is not able to solely fulfill the requirements as a company secretary of a listed issuer stipulated under Rules 3.28 and 8.17 of the Listing Rules. Therefore, we have appointed Ms. Mak, an associate member of the Hong Kong Institute of Chartered Secretaries and the Institute of Chartered Secretaries and Administrators in the United Kingdom, who is qualified under Rules 3.28 and 8.17 of the Listing Rules to act as the other joint company secretary to work closely with and provide assistance to Mr. Li Wenchang.

Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange [has granted] us, a waiver from strict compliance with the requirements under Rules 3.28 and 8.17 of the Listing Rules in relation to the appointment of Mr. Li Wenchang as our joint company secretary on the condition that Mr. Li Wenchang will be assisted by Ms. Mak as our joint company secretary throughout the three-year period from the [REDACTED]. Being the vice

–93– 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. WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES president of SWCS Corporate Services Group (Hong Kong) Limited and by virtue of her experience in corporate secretarial practice, Ms. Mak is, in our Directors’ opinion, a person who is qualified and suitable to provide assistance to Mr. Li Wenchang, for a three-year period from the [REDACTED] so as to enable Mr. Li Wenchang to acquire the relevant experience (as required under Rule 3.28(2) of the Listing Rules) to duly discharge his duties. In addition, Mr. Li Wenchang will comply with the annual professional training requirement under Rule 3.29 of the Listing Rules and will enhance him knowledge of the Listing Rules during the three-year period from the [REDACTED]. Our Company will further ensure that Mr. Li Wenchang has access to the relevant trainings and support which will enhance him understanding of the Listing Rules and the duties of a company secretary of a listed issuer on the Stock Exchange.

Such waiver will be revoked immediately if and when Ms. Mak ceases to provide such assistance or ceases to meet the requirements under Rule 3.28 of the Listing Rules, or if there are material breaches of the Listing Rules by our Company. We will liaise with the Stock Exchange before the end of the three-year period to enable it to assess whether Mr. Li Wenchang, having had the benefit of Ms. Mak’s assistance for three years, will have acquired the relevant experience within the meaning of Rule 3.28 of the Listing Rules so that a further waiver will not be necessary.

See “Directors and Senior Management” in this Document for the biographical details of Mr. Li Wenchang and Ms. Mak.

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Registered office 190 Elgin Avenue George Town Grand Cayman KY1-9008 Cayman Islands

Headquarter and principal place of 3501, R&F Center business in the PRC No. 10, Huaxia Road Tianhe District Guangzhou Guangdong Province PRC

Principal place of business in 40th Floor Hong Kong Dah Sing Financial Centre No. 248 Queen’s Road East Wanchai Hong Kong

Company’s website www.rf-living.com (the information contained on this website does not form part of this Document)

Joint company secretaries Mr. Li Wenchang (李文昌) 45/F, R&F Center No. 10, Huaxia Road Tianhe District Guangzhou Guangdong Province PRC

Ms. Mak Po Man Cherie (麥寶文) 40th Floor Dah Sing Financial Centre No. 248 Queen’s Road East Wanchai Hong Kong

Authorized representatives Mr. Hu Jie (胡傑) No. 24, Shuiyin Road Yuexiu District Guangzhou Guangdong Province PRC

Ms. Mak Po Man Cherie (麥寶文) 40th Floor Dah Sing Financial Centre No. 248 Queen’s Road East Wanchai Hong Kong

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Audit Committee Ms. Xin Zhu (辛珠) (chairperson) Mr. Li Sze Lim (李思廉) Mr. Zheng Ercheng (鄭爾城)

Remuneration Committee Mr. Zheng Ercheng (鄭爾城) (chairperson) Mr. Li Sze Lim (李思廉) Mr. Zhang Yucong (張宇聰)

Nomination Committee Ms. Wang Heng (王珩) (chairperson) Mr. Zheng Ercheng (鄭爾城) Mr. Zhang Yucong (張宇聰)

Principal Share Registrar and transfer office in the Cayman Islands [REDACTED]

Hong Kong Share Registrar

[REDACTED]

Compliance advisor Maxa Capital Limited Unit 1908 Harbour Center Wanchai Hong Kong

Principal bank(s) Industrial and Commercial Bank of China Guangzhou Middle Dezheng Road Branch No. 316-318, Dezheng Middle Road Yuexiu District Guangzhou Guangdong Province PRC

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The information contained in this section is derived from various government publications, other publications and the market research report prepared by CIA, which was commissioned by us. We believe that the sources of the information presented here are appropriate, including forward-looking information for future periods as identified, and we have taken reasonable care in extracting and reproducing such information. We have no reason to believe that such information is false or misleading or that any fact has been omitted that would render such information false or misleading. We, the Joint Sponsors, [REDACTED], [REDACTED], [REDACTED] and the [REDACTED], any of our or their respective directors, officers, employees, agents or representatives or any other person (other than CIA) involved in the [REDACTED] have not independently verified such information and have made no representation as to the accuracy, completeness or fairness of such information. The information may not be consistent with other information available from other sources within or outside the PRC. As a result, you should not unduly rely on such information.

RESEARCH BACKGROUND AND METHODOLOGIES OF CIA

In connection with the [REDACTED], we have commissioned CIA, an Independent Third Party, to conduct a detailed analysis and to prepare an industry report on the PRC property management industry. Such report has been prepared by CIA independently from our influence. We have agreed to pay CIA a fee of RMB800,000 for the preparation of such report which we consider is in line with the market rates. CIA is an independent real estate research institute co-founded by experts with over 500 professional analysts. CIA has extensive experience in researching and tracking the PRC property management industry, and has conducted research on the Top 100 Property Management Companies in China since 2008. In conducting its research, CIA primarily evaluates property management companies that have managed at least 10 properties or an aggregate GFA of 500,000 sq.m. or more in the previous three years. CIA uses research parameters and assumptions and gathers data from a multiple primary and secondary sources, including (i) published statistics, websites and marketing materials of property management companies; (ii) surveys and data from the China Real Estate Index System and the China Real Estate Statistics Yearbooks; (iii) public data from governmental authorities; and (iv) data gathered for prior reports it has published. In addition, since 2008, CIA has been publishing its ranking of China’s Top 100 Property Management Companies in terms of overall strength, primarily by evaluating data from the previous year in relation to management scale, operational performance, service quality, growth potential and social responsibility of the property management companies under consideration. In determining such rankings, CIA may assign the same ranking to multiple companies with the same or very close scores, and therefore it is possible that more than 100 companies may be classified as being among the Top 100 Property Management Companies in the industry. CIA may, upon specific request, prepare further rankings within the Top 100 Property Management Companies for certain indices. CIA also assesses the growth potential of property management companies primarily in terms of growth rate of revenue, growth rate of total GFA under management, contracted but undelivered GFA, the total number of employees and employee composition. Data analysis in this section includes data and information on the Top 100 Property Management Companies as ranked by CIA.

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In preparing the CIA report, CIA assumed that: (i) the social, economic and political conditions in China and the world will remain stable during the forecast period; (ii) government policies on the property management industry in the PRC will remain unchanged during the forecast period; (iii) all published data by the relevant statistics bureaus are accurate; and (iv) all information relating to residential sales transactions collected from the relevant local housing administrative bureaus is accurate.

Our Directors confirm that, after making reasonable inquiries, there is no material adverse change in the market information since the date of the CIA Report which may qualify, contradict, misrepresent or otherwise adversely affect the accuracy and completeness of the information in this section in material respects.

OVERVIEW OF THE REAL ESTATE MARKET IN THE PRC

Macroeconomy and the Real Estate Market in the PRC

China’s economy has been growing steadily from 2015 to 2020. Despite the COVID-19 pandemic, China was the only one of the major economies that achieved positive growth in gross domestic product, or GDP, in 2020. China’s GDP in 2020 increased by 2.3% from 2019 and reached RMB101.6 trillion, surpassing the GDP in 2019 by RMB2.5 trillion, representing a CAGR of 8.1% since 2015, according to CIA. The new GDP growth drivers focus on optimizing the economic structure and improving quality of life, and have gradually replaced traditional growth drivers.

Supported by favorable government regulations and policies such as the New National Urbanization Plan (2014-2020) (《國家新型城鎮化規劃(2014-2020)》), China has been urbanizing rapidly. In 2019, China’s urbanization rate was 60.6%, and urban population reached 848 million. Following such rapid urbanization, the per capita disposable income has been continuously growing as well, manifested by a CAGR of 7.0% between 2015 and 2020.

Driven by rapid urbanization and growing per capita disposable income, investment in the real estate market in China remains active, which lays a solid foundation for the continuous development in the real estate market in China, according to CIA. The following chart shows the development of China’s commodity property market between 2015 and 2020:

CAGR from 2015 to 2015 2016 2017 2018 2019 2020 2020

Total investments in real estate development (RMB in billion) .... 9,597.9 10,258.1 10,979.9 12,026.4 13,219.4 14,144.3 8.1% Investments in commodity residential properties development (RMB in billion) .... 6,459.5 6,870.4 7,514.8 8,512.4 9,707.1 10,444.6 10.1%

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CAGR from 2015 to 2015 2016 2017 2018 2019 2020 2020

Sales of commodity properties (RMB in billion) .... 8,728.1 11,762.7 13,370.1 14,997.3 15,972.5 17,361.3 14.7% Sales of commodity residential properties (RMB in billion) .... 7,275.3 9,906.4 11,024.0 12,639.3 13,944.0 15,456.7 16.3% Sales area of commodity properties (sq.m. in million) . . . 1,285.0 1,573.5 1,694.1 1,714.6 1,715.6 1,760.9 6.5% Sales area of commodity residential properties (sq.m. in million) .... 1,124.1 1,375.4 1,447.9 1,479.3 1,501.4 1,548.8 6.6%

As noted from the above chart, both development investment in and sales of commercial properties have reached a stage of stable growth; the demand for property management services is expected to continue to grow in tandem with the rising level of urbanization, and Chinese consumers, especially urban residents, are expected to continue to be willing to pay premiums for high-quality property management services with their increasing per capita disposable income.

The Guangdong-Hong Kong-Macao Greater Bay Area (the “GBA”) and the Real Estate Market

On February 18, 2019, the Central Committee and the State Council issued the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area (《粵港澳大灣區發展規劃綱要》) (the “Outline Development Plan”), laying out the blueprint to build the GBA a world-class city cluster. The Outline Development Plan is expected to foster communications among residents of Mainland China, Hong Kong and Macau, and provide a platform for international cooperation as well as innovation.

Stimulated by the Outline Development Plan, the real estate market in the GBA welcomes a period of strategic development opportunities. In 2019, total property development investment amounts in Guangzhou and Shenzhen both surpassed RMB3.0 trillion; the CAGR of the amount of property development investment in Shenzhen between 2015 and 2019 reached 23.1%, and the CAGRs of the amount of property development investment in other major cities such as Foshan, Jiangmen and Zhaoqing all surpassed 20%, and the total sales of commodity properties in Guangzhou and Shenzhen hit RMB3.3 trillion and RMB4.5 trillion, respectively, in 2019, representing a 12.1% and 8.2% increase from 2018, respectively. Although the real estate market in the GBA was negatively impacted by the COVID-19 pandemic, it also took the lead in rapidly recovering since March 2020 as the COVID-19 pandemic was under control in the PRC. As the GBA development plan unfolds and with the influx of talent, it is expected that urban residents’ consumption level will increase in tandem, according to CIA.

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THE CHINESE PROPERTY MANAGEMENT INDUSTRY

Overview

The property management industry in China can be traced back to 1981, when the first property management company was established in Shenzhen. Since then, the Chinese Government has sought to construct and update a regulatory framework for the Chinese property management industry in parallel with its growth. Followed by the official promulgation of the Provisions on Property Management (《物業管理條例》) in 2003 and Property Law of the PRC (《中華人民共和國物權法》) in 2007, the regulatory framework for the property management industry gradually took shape and matured, and the Chinese property management industry has undergone the initial stage, the standardized stage and the diversified stage.

With the adoption of advance technologies, such as cloud computing, Internet of Things, big data, artificial intelligence and augmented reality (“AR”), the property management companies are gradually replacing labor with smart management system in business operations. The PRC Government has also promulgated a series of favorable policies supporting the development and modernization of property management industry. In addition, property management companies have gained wider access to the capital market for equity and/or debt financing since 2014, following the listings of property management companies. Driven by the technology development, governmental support and capital market activities, the property management industry is expected to maintain rapid growth.

Sources of Income in the Chinese Property Management Industry

In China, property management companies’ income primarily come from property management service fees and various other operational income, including value-added services to property owners and non-property owners.

Property management service fees refer to income derived from property management companies’ provision of basic property management services, such as cleaning, security, repair and maintenance services, to property owners, residents, and tenants. Various other operational income refer to income derived from operational activities other than the provision of basic property management services, including (i) value-added services, such as common area operation, property agency, e-commerce, elderly care, and housekeeping and cleaning services; and (ii) value-added services to non-property owners, such as sales office management, consulting, engineering, and other services.

Major Fee Models in the Chinese Property Management Industry

In China, property management service fees may be charged either on a lump sum basis or a commission basis. The lump-sum fee model for property management fees is the dominant fee model in the property management industry in China, especially for residential properties. The lump-sum fee model can bring efficiency by dispensing certain collective decision-making

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Property Management Services

According to CIA, the average aggregate GFA under management of properties managed by the Top 100 Property Management Companies in China reached 42.8 million sq.m. as of December 31, 2019, representing a 15.1% increase from 2018 and a CAGR of 21.6% from 2014 to 2019; the average number of properties managed by the Top 100 Property Management Companies in China reached 212 as of December 31, 2019, representing a 10.4% increase from 2018 and a CAGR of 17.7% from 2014 to 2019, while the total market shares of the Top 100 Property Management Companies in China continued to increase and reached 43.6% in 2019, which is 4.8% higher than it was in 2018. In comparison, the aggregate GFA under our management as of December 31, 2019 reached 54.5 million sq.m., and the number of properties we managed as of the same date was 214. The following chart sets forth the average aggregate GFA under management, average number of properties under management, and total market shares of the Top 100 Property Management Companies in China for the years indicated.

Unit: million sq.m & each 350 45.4% 46.3% 50% 43.6% 43.7% 44.1% 44.7% 297 45% 300 38.9% 278 260 40% 32.4% 243 250 227 35% 28.4% 29.4% 212 192 30% 200 178 166 25% 19.5% 154 150 20% 100 94 15% 56.1 60.0 10% 42.8 45.8 49.0 52.4 50 27.3 31.6 37.2 16.1 23.6 5% 0 0% 2014 2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E

Average Aggregate GFA under Management by the Top 100 Property Management Companies Average Number of Properties Managed by the Top 100 Property Management Companies Total Market Shares of the Top 100 Property Management Companies

According to CIA, the aggregate GFA under management of residential properties managed by the Top 100 Property Management Companies in China reached 7.2 billion sq.m. in 2019, which accounted for 68.9% of the aggregate GFA under management of properties in China, representing a 18.9% increase from 2018 and a CAGR of 26.6% since 2014; the aggregate GFA under management of non-residential properties managed by the Top 100 Property Management Companies in China reached 3.3 billion sq.m, which accounted for 31.1% of the aggregate GFA under management of properties in China, representing a 52.4% increase from 2018 and a CAGR of 30.4% from 2017 to 2019.

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In line with the increase in aggregate GFA under management, the average total revenue of the Top 100 Property Management Companies in China amounted to RMB1.0 billion in 2019, representing a CAGR of 19.6% since 2014; revenue of the Top 100 Property Management Companies in China that is derived from basic property management services amounted to RMB0.8 billion in 2019, representing a 14.6% increase from 2018, while revenue of the Top 100 Property Management Companies in China that is derived from value-added services amounted to RMB0.2 billion in 2019, representing a 29.0% increase from 2018. Given the continuously expanding property management services, the gross profits and gross profit margins of the Top 100 Property Management Companies in China also increased steadily. According to CIA, the average gross profit of the Top 100 Property Management Companies in China amounted to RMB249.9 million in 2019, representing a 19.7% of increase from 2018, and the average gross profit margin of the Top 100 Property Management Companies in China was 24.0% in 2019, representing a 0.46% increase since 2018. Benefiting from the economies of scale and improving cost control measures, the average net profit margin of the Top 100 Property Management Companies in China amounted to RMB91.1 million, representing a 26.2% increase from 2018, among which net profit from property management services amounted to RMB49.0 million, representing an increase of 21.9% from 2018, and net profit from value-added services amounted to RMB42.1 million, representing a 31.6% increase from 2018.

GROWTH DRIVERS OF THE CHINESE PROPERTY MANAGEMENT INDUSTRY

According to CIA, the growth of the Chinese property management industry depends on the following key drivers.

Favorable Policies

The property management industry is susceptible to change in regulatory policies. Therefore, favorable laws, regulations and policies play a critical role in health and growth of China’s property management industry.

In June 2003, the State Council promulgated the Regulations on Property Management (《物業管理條例》), establishing a regulatory framework for the property management industry in China. Since then, a series of favorable policies supporting the development of the property management industry have come into effect. These include, but are not limited to, the Circular of the NDRC on the Opinions of Relaxing Price Controls in Certain Services (《國家發展和改革委關於放開部分服務價格意見的通知》), which requires provincial level price administration authorities to abolish all price control or guidance policies on non-government supported properties other than government-supported housing, housing reform properties, properties in old residential areas and preliminary property management services; the Guidance on Accelerating the Development of the Resident Service Industry to Promote the Upgrading of Consumption Structure (《關於加快發展生活性服務業促進消費結構升級的指導意見》), which aims to further standardize the provision of property management services as part of the industrial upgrade and diversification of the resident service sectors; and the Announcement on Preferential Taxation for the Elderly Care, Child Care, Housekeeping and Other Community Living Services (《關於養老、托育、家政等社區家庭服務業稅費優惠政策的公告》).

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Certain favorable policies also encourage the development of smart communities. In May 2014, the Ministry of Housing and Urban-rural Development issued Guidance on Smart Community Construction (Trial) (《智慧社區建設指南(試行)》), which recommends the modernization of community management by integrating modern technologies, public resources and commercial services into the management process. In August 2014, the NDRC released the Guiding Opinion on the Promotion of the Healthy Development of Smart Cities (《關於促進智慧城市健康發展的指導意見》), which laid out a comprehensive plan for the development of smart cities in the PRC. In December 2018, the NDRC promulgated the Notice on Continuing to Evaluate the Development of New Smart Cities and Further Promoting the Rapid and Healthy Development of New Smart Cities (《關於繼續開展新型智慧城市建設評價工作深入推動新型智慧城市健康快速發展的通知》). These policies broaden the scope of property management services and bring more prospects for the property management industry. We expect that these policies jointly create and will continue to offer a supportive environment and accelerate the development of the industry and property management companies in China.

On January 5, 2021, 10 ministries, including the Ministry of Housing and Urban-Rural Development, the Central Political and Legal Affairs Commission, and the Office of the Central Guidance Commission on Building Spiritual Civilization, jointly issued the Notice on Strengthening and Improving Residential Property Management (《關於加強和改進住宅物業管理工作的通知》). The Notice focuses on the improvement of property management services and the development of lifestyle services, and encourages qualified property service companies to expand into areas such as elderly care, childcare, housekeeping, health, housing brokerage, delivery, and other value-added services. The Notice sends out a positive signal to the property management industry and it is foreseeable that property management companies’ scope of operation will expand in the near future.

Increased Demand for High Quality Property Management Services

According to the CIA, China’s rapid urbanization and growth in per capita disposable income have been the major driver for the growth of the property management industry. Chinese consumers increasingly demand better living conditions and quality property management services, which is another underlying reason for the growth of the Chinese property management industry. In addition, we believe the emerging middle-to high-income class in China and their growing spending power will have a significant influence on the development of mid-to high-end property management services in China through their demand for more quality products and services.

Deepening Reform of the Capital Market

Since June 2014 when the first Chinese property management company went public on the Stock Exchange, the capital market has been a key driver of the Chinese property management industry in terms of capital raising, strategic investment, and liquidity. According to CIA, as of December 31, 2020, 38 Chinese property management companies were listed on the Stock Exchange.

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Besides the Stock Exchange, the capital market in Mainland has been gaining traction as reform depends. In November 2015, the China Securities Regulatory Commission issued Several Opinions on Further Regulating the Operation of Issuance Review Powers (《關於進一步規範發行審核權力運行的若干意見》) and Several Opinions on Further Promoting the Development of the National SME Share Transfer System (《關於進一步推進全國中小企業股份轉讓系統發展的若干意見》). According to CIA, as of December 31, 2020, 35 Chinese property management companies were listed on the NEEQ. It is expected that various capital-raising channels will continue to drive the development of the property management industry in China.

Integration of Information Technology

As information technology becomes more integrated with property management services, technological advancement, such as 5G, plays an increasingly important role in the development of the property management industry. By introducing smart facility, such as smart patrol system, gate system, and parking management system, property management companies can be further standardize, automized, and centrally managed, increasing efficiency while reducing reliance on manual labor. In addition, by digitalizing their internal systems, property management companies can streamline their respective corporate structure, boost intra- company synergy among different departments, and reduce communication cost. According to CIA, the average operational costs of the Top 100 Property Management Companies in China accounted for approximately 76.0% of their total revenue in 2019, representing a 0.46% decrease from 2018.

TRENDS IN THE PRC PROPERTY MANAGEMENT INDUSTRY

Key market trends of the property management industry in China include:

Increasing Market Concentration

In order to expand GFA under management and realize economies of scale to strengthen market positions, large-scale property management companies have been actively accelerating their expansions by means of both organic growth and mergers and acquisitions of small-and medium-sized property management companies. As a result, the market continues to become more concentrated. According to CIA, in 2015 the aggregate GFA under management of the Top 100 Property Management Companies in China amounted to approximately 28.4% of the total GFA under management in China; this number has climbed to 43.6% in 2019, signaling continuous market concentration.

Increasing Adoption of Information Technology

Many property management companies have actively embraced information technologies such as cloud computing, Internet of Things, big data, artificial intelligence and AR as means to reduce labor costs and enhanced profitability. For instance, by adopting new technologies and using digital platforms, property management companies could effectively integrate and

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Diversifying Revenue Sources through Multiple Channels

Benefiting from the growth of value-added services which are typically accompanied with higher profitability, the Top 100 Property Management Companies in China continued to diversify and optimize the mix of their revenue sources. These mainly include pre-delivery services and consultancy services to property developers and community value-added service to property owners and residents, such as common space operation, property agency, e-commerce, and housekeeping services. According to CIA, in 2019 the average revenue generated from multiple operations of the Top 100 Property Management Companies in China amounted to RMB0.2 billion, which accounted for 21.5% of their average total revenue, representing a 1.94% increase from 2018.

Professionalized Staff and Enhanced Service Quality

To enhance service quality and reduce labor costs, property management companies in China have set up their own internal standardized operating procedures and favor talents who can efficiently utilize information technologies in their daily operations. Property management companies in China are also increasingly outsourcing labor-intensive aspects of their operations to subcontractors while placing greater emphasis on recruiting and training professionalized and skilled employees to facilitate the implementation of smart management and information technologies and promote innovations to maintain their leading market positions.

Increasing Support from Capital Markets

The development of capital markets continues to intensify. A number of property management companies participate in capital markets to expand their financing channels. As of December 31, 2020, there were 38 property management companies listed on the Stock Exchange, two property management company listed on the Shanghai Stock Exchange (上海證券交易所上市), two property management companies listed on the Shenzhen Stock Exchange (深圳證券交易所上市) and 35 property management companies listed on the National Equities Exchange and Quotations (全國中小企業股份轉讓系統). By doing so, such listed property management companies are able to increase investment in technology innovation, build up intelligent platforms, strengthen the cooperation with other property management companies, improve service quality and increase operational efficiency. In addition, diversified capital sources enable the property management companies to accelerate selective and strategic mergers and acquisitions, and to further expand the scale of business.

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Increasing Standardization of Services

One critical step of market expansion of property management companies is to provide standardized services, which is the foundation for the sustainable expansion of business operations across regions. In December 2015, the General Office of the State Council issued the Guiding Opinions on Accelerating the Development of Life Service Industry and Promoting the Upgrade of Consumption Structure (《關於加快發展生活性服務業促進消費結構升級的指導意見》), which promulgates the standardization of property management and leasing services. Many of property management companies in China have since established internal standardized operating procedures to guide their provision of services. Subsequently in December 2015, the General Office of the State Council issued the Plan for the Development of the National Standardization System Construction (2016-2020) (《國家標準化體系建設發展規劃(2016-2020年)》), which specifically points out that new standards shall embrace information technology and foster technological innovation. As a result, an increasing number of property management companies use information technology to implement technological solutions for automating key business operations in recent years. It is foreseeable that information technology will continue to play a key role in the property management industry’s future development and sustainable growth.

COMPETITION

Competition Landscape

The property management industry in China is highly competitive and fragmented. As of December 31, 2019, there were approximately 130,000 property management companies in the property management industry. According to CIA, in recent years property management companies of large size tend to have more operational advantages. In 2019, the average aggregate GFA under management of the Top 10 Property Management Companies in China in terms of GFA under management amounted to 233.7 million sq.m, which is 5.5 times as large as the average aggregate GFA under management of the Top 100 Property Management Companies in China; the average net profit of the Top 10 Property Management Companies in China in terms of GFA under management amounted to RMB0.6 billion, which is 6.3 times as much as the average net profit of the Top 100 Property Management Companies in China.

Our Competition Position

We are a leading comprehensive property management and community living service provider in China according to CIA. As of December 31, 2020, we contracted with 660 projects and managed 552 of them, our aggregate GFA under management amounted to 69.4 million sq.m. We were ranked 11th among the 2021 Top 100 Property Management Companies in China. In 2020, we were ranked the second in terms of net profit growth as compared to the property services companies that were listed on the Stock Exchange as of December 31, 2020. In 2019, we were ranked the second among the top 100 property management companies

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Entry Barrier

According to CIA, there are a few barriers to enter into the property management industry, including:

• Brand. Brand reputation is key to the development and expansion of property management companies. As consumers are demanding higher quality property management and the players in the property management industry are growing, it is critical for property management companies to offer services of superior quality. Brand reputation therefore increasingly becomes an entry barrier in the industry. We and the other Top 100 Property Management Companies have built our brand reputations in China through decades of services and operations. In contrast, newer entrants without an established brand and cultivated business relationships with industry participants face a greater challenge when penetrating into the market.

• Technical and experience barriers. The technicality of property management services is reflected on a property management company’s business model, which depends heavily on the experience and professional capabilities of the company’s personnel. A business model is a complex and organic collection that covers market researching and positioning, tenant sourcing and management, and commercial operation and promotion. Experienced personnel can leverage on their experience of and insight in the industry to distill the processes and technology that best fit a company in business model construction. In contrast, it’s increasingly difficult for newer entrants to accumulate and integrate practical experience in the industry and translate such experience into a fitting business model.

• Professional talent. Property management services depend on manual labor, not only for the performance of services but also for implementing and innovating technological solutions such as big data and internet technologies. In addition, the innovation of business models, especially the launch of value-added services to property owners and property developers and consultancy services to property developers, requires significant support from talented employees. It is increasingly difficult for property management companies to recruit and retain talented individuals who are up to date with the technological advances in the industry to help achieve the above-mentioned goals.

• Client acquisition. On one hand, clients are more inclined to choose mature property management companies with reputable brands and proven track record that are backed by real estate developer parents. On the other hand, property management companies backed by real estate developer parents generally are able to grow much more rapidly and establish decent track record by managing projects developed by

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parents and associates of parents. Since new entrants typically lack competitive advantage in terms of brand, talent, and experience, it is difficult for new entrants to acquire new clients, not to mention snatching existing clients from the more mature and experienced competitors.

• Benchmark project. Given the high competitiveness of the property management industry, clients tend to choose property management companies with successful benchmark projects in their portfolios. Since it takes time and experience to establish benchmark projects, it is difficult for new entrants to compete with the more mature and experienced competitors on this dimension.

IMPACT OF COVID-19

According to CIA, the COVID-19 outbreak has caused certain short-term negative impacts on the property management industry in China, which primarily include higher cost of sales and slower business expansion. The increase in cost of sales was primarily due to (i) an increase in on-site staff’s demand for face masks, gloves, and sanitizer; (ii) the need to sanitize common areas more regularly; and (iii) an increase in overtime expense and epidemic subsidies paid to on-site staff. The slowdown in business expansion was primarily due to an increase in managerial pressure, insufficient materials and equipment, and the need to reduce human interaction.

Despite the short-term negative impacts, the COVID-19 outbreak is expected to bring limited impact on the property management industry in China in the long run. According to CIA, the COVID-19 outbreak has been effectively controlled. The national GDP of China in 2020 amounted to RMB101.6 trillion, representing a 2.3% increase from 2019. Although China’s GDP shrank 6.8% in the first quarter of 2020, its powerful state clamped down on COVID-19, allowing its economy to grow 3.2%, 4.9% and 6.5% in the second, third and fourth quarter of 2020, respectively, beating market expectation. Therefore, the outlook for the demand of residential and commercial properties as well as the related property management services are expected to remain positive. In addition, the COVID-19 outbreak is expected to bring new development opportunities accordingly to CIA, given that (i) more capital will be available to the property management industry since the property management industry has proven that it was non-cyclical and risk-resistant during the pandemic; (ii) during the pandemic, property management companies are encouraged to accelerate the development of mobile applications, internet platforms and smart community technologies in order to provide better services to their customers while reducing human interaction; (iii) due to the quarantine restrictions, property management companies have more opportunities to communicate with customers, understand their demands, and explore new value-added services; (iv) property management companies that are capable of delivering quality services have gained higher customer satisfaction and customer loyalty; and (v) the Chinese Government has implemented various favorable policies such as tax reliefs and government grants to property management industries.

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Our business operations are fully supervised and regulated by the Chinese government. The following contains a summary of the important laws, regulations and policies which we are subject to.

CHINESE LAWS AND REGULATIONS RELATED TO FOREIGN INVESTMENT

The Law of the People’s Republic of China on Foreign Investment (Decree No. 26 of the President of the People’s Republic of China) (“Foreign Investment Law”), which was adopted by the National People’s Congress on 15 March 2019 and came into force on 1 January 2020, replaces the Law of the People’s Republic of China on Chinese-Foreign Joint Ventures, Law of the People’s Republic of China on Chinese-Foreign Cooperative Enterprises and Law of the People’s Republic of China on Foreign Investment Enterprises as the legal basis for foreign investment in China. The Regulations on the Implementation of the Law of the People’s Republic of China on Foreign Investment (Decree No. 723 of the State Council of the People’s Republic of China), which was promulgated by the State Council on 26 December 2019 and took effect on 1 January 2020, replace the Regulations on the Implementation of the Law on Chinese-Foreign Joint Ventures, the Interim Provisions on the Term of Joint Venture of Chinese-Foreign Joint Ventures, the Rules for the Implementation of the Law on Foreign Investment Enterprises and the Rules for the Implementation of the Law on Chinese-Foreign Cooperative Enterprises”.

The Foreign Investment Law provides the basic regulatory framework for foreign investment and implements a pre-establishment national treatment plus negative list management system for foreign investment, under which (1) foreign natural person, enterprises or other organizations (collectively referred to as “foreign investors”) shall not invest in the fields where investment is prohibited in the negative list for foreign investment access, (2) foreign investors should meet the requirements of the negative list when they invest in the fields restricted by the list, and (3) areas beyond the negative list for foreign investment access shall be managed in accordance with the principle of consistency between domestic and foreign investment. The Foreign Investment Law also contains the necessary mechanisms to promote, protect and manage foreign investment. The Foreign Investment Information Reporting Measures (Order No. 2 of 2019 of the Ministry of Commerce of the People’s Republic of China and the State Administration of Market Administration of the People’s Republic of China) which was issued by the Ministry of Commerce and the State Administration of Market Administration on 30 December 2019 and came into effect on 1 January 2020, clearly establishes a foreign investment information reporting system stipulating that foreign investors or foreign-invested enterprises shall report investment information to the competent commerce department through the enterprise registration system as well as the enterprise credit information publicity system.

The Catalogue of Industries Encouraging Foreign Investment (2019 Edition) promulgated by the National Development and Reform Commission (“NDRC”) and the Ministry of Commerce on 30 June 2019 shall take effect on 30 July 2019. The Catalogue for the Guidance of Foreign Investment Industries (2017 Revision) issued on 28 June 2017 and the Catalogue of Industries with Advantages for Foreign Investment in Central and Western Regions of China (2017 Revision) issued on 17 February 2017 shall be repealed at the same time.

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According to the Special Administrative Measures for Foreign Investment Access (Negative List) (2020 Version) and Special Administrative Measures for Foreign Investment Access in the Pilot Free Trade Zone (Negative List) (2020 Version) promulgated by the National Development and Reform Commission and the Ministry of Commerce on 23 June 2020 and effective on 23 July 2020, property management services do not fall under the category of restricted or prohibited foreign investment.

LEGAL SUPERVISION OF PROPERTY MANAGEMENT SERVICES AND OTHER RELATED SERVICES

Property service enterprise qualification

According to the Property Management Regulations (Revised in 2016) (Decree No. 666 of the State Council) promulgated by the State Council on 8 June 2003, effective on 1 September 2003 and amended on 26 August 2007 and 6 February 2016, the State shall implement a qualification management system for enterprises engaged in property management services and these enterprises shall have independent legal personality. The construction administrative department of the State Council shall, in conjunction with relevant departments, establish a joint incentive for trustworthiness and a joint disciplinary mechanism for breach of trust to strengthen the integrity management of the industry.

According to The State Council on the Third Batch of the Abolition of the Central Designated Local Implementation of Administrative Licensing Matters ([2017] No. 7) promulgated and effective on 12 January 2017 and the Decision of the State Council on the Abolition of a Batch of Administrative Licensing Matters (State Issue [2017] No. 46) promulgated and effective on 22 September 2017, respectively, the State has cancelled provincial and municipal housing and urban-rural construction authorities from approving the second-level and lower qualifications of property service enterprises and the first-level qualifications of property service enterprises.

According to the Notice of the General Office of the Ministry of Housing and Urban-Rural Development on the Work Related to the Cancellation of the Qualification Approval of Property Service Enterprises ([2017] No. 75) promulgated by the General Office of the Ministry of Housing and Urban-Rural Development and effective on 15 December 2017, all departments shall no longer accept applications for the qualification approval of property service enterprises and applications for qualification change, replacement and re-issuance, and shall not require the original approved qualification of property service enterprises as a condition for undertaking property management business.

The State Council promulgated the Decision of the State Council on Amending and Abolishing Some Administrative Regulations (State Council Decree No. 698) on 19 March 2018, in which the relevant provisions of the Property Management Regulations (2016 Revision) were amended. According to the revised Property Management Regulations (2018 Revision) (“Property Management Regulations”), the State has completely abolished the qualification approval of property service enterprises.

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Appointment of property management companies

According to the Property Law of the People’s Republic of China (Decree No. 62 of the President of the People’s Republic of China) (“Property Law”) promulgated by the National People’s Congress on 16 March 2007 and effective on 1 October 2007, the owner may manage the building and its appurtenant facilities by himself, or may entrust them to property service companies or managers. The owner has the right to replace the property service company or other managers hired by the construction company in accordance with the law. Under the owner’s supervision, property service companies or other managers manage buildings and their appurtenant facilities in the building zone according to his commission. The Civil Code of the People’s Republic of China (Decree No. 45 of the President of the People’s Republic of China, “Civil Code”), which was promulgated by the National People’s Congress on 28 May 2020 and came into force on 1 January 2021 as the above-mentioned law was repealed, also expressly grants the owners the right to jointly decide to select and dismiss property service enterprises or other managers, making the same provisions as the Property Law.

According to property management regulations, property service enterprises can be selected and dismissed at the community owners’ meeting with the consent of the owners of more than half of the total building area of the exclusive part of the community and the consent of more than half of the total number of owners. On behalf of the owners’ general meeting, the owners’ committee may sign a property management service contract with the property service enterprise selected by the meeting. Before the owners and the owners’ meeting select and appoint property service enterprises, the construction company selecting and hiring property service enterprises should sign a written pre-service contract. A term can be stipulated in the contract. If the term has not expired and the property service contract signed between the owners’ committee and the property service enterprise takes effect, the preliminary property service contract shall be terminated. The Civil Code has made provisions on the above voting method more conducive to the formation of an effective resolution at the owners’ meeting, namely, from 1 January 2021, the property service enterprise may be selected and dismissed by the owners of more than two-thirds of the area of the exclusive portion and more than two-thirds of the number of owners participating in the voting, and with the consent of more than half of the owners of the area of the exclusive portion and more than half of the number of owners participating in the voting.

According to property management regulations, property service enterprises may entrust the special services in the property management area to professional service enterprises, but may not entrust all property management in the area to others. The Civil Code also stipulates that a property service enterprise shall not entrust all property services to a third party or sub-delegate all property services to a third party. However, the law also allows a property service enterprise to entrust part of the special services in the property service area to a professional service organization or a third party, except that it is clearly stipulated that property service enterprises shall be responsible to the owners for the special services entrusted to them.

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According to property management regulations and Interim Measures for the Management of Preliminary Property Management Bidding ([2003] No. 130) promulgated by the former Ministry of Construction on 26 June 2003 and effective on 1 September 2003, property management enterprises shall be selected and hired by means of bidding for residential and non-residential construction sites in the same property management area. The bidders shall, within 15 days from the date of determining the successful one, put on record in the real estate administrative departments of the local people’s government above the county-level. If the number of bidders is less than three or property size is small, approved by the local real estate administrative departments, the property management enterprise can be selected and hired by agreement.

According to the Law of the People’s Republic of China on Government Procurement (Decree No. 14 of the President of the People’s Republic of China) promulgated by the Standing Committee of the National People’s Congress on 29 June 2002 and implemented on 1 January 2003 and amended on 31 August 2014, state organs, institutions and organizations at all levels shall use financial funds to procure services within the centralized procurement catalog established by law or above the relevant provisions of the law in accordance with the relevant provisions of the law. Public bidding is the main method of government procurement. The State Council stipulates the specific amount standard of the government procurement project of the central budget while the people’s governments of provinces, autonomous regions and municipalities directly under the central government stipulates the amount standard of the government procurement project of the local budget.

Prior to the promulgation of the Civil Code, the Interpretation of the Supreme People’s Court on Several Issues Concerning the Specific Application of Law in the Trial of Property Service Disputes ([2009] No. 8), promulgated by the Supreme People’s Court on 15 May 2009 and effective on 1 October 2009, set out the principles of interpretation to be adopted by the courts in the trial of disputes between property owners and property service enterprises on specific issues. For example, the pre-property service contract signed between the construction company and the property service enterprise according to law, as well as the property service contract signed between the owners’ committee and the property service enterprise selected by the owners’ general meeting according to law, is legally binding on the owners. The People’s Court shall not support any defense raised by the owners on the ground that they are not parties to the contract. If the owners’ committee or the owners appeal to the court to confirm the invalidity of the property service contract provisions that exempt the property service enterprise from liability, increase the liability of the owners’ committee or the owners or impair their rights, the people’s court shall support it. The Civil Code also clearly stipulates that the pre-property service contract entered into by the construction company and the property service provider in accordance with the law is legally binding on the owner.

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Charges for property management enterprises

Property management fees

According to the Measures for the Administration of property service charges (Development and Reform Commission Price [2003] No. 1864), which was jointly promulgated by the National Development and Reform Commission and the former Ministry of Construction on November 13, 2003, and came into effect on January 1, 2004, the property management enterprises shall, in accordance with the provisions of the property management contract, charge the owner fees for the management and the maintenance of the environmental health and order in the relevant areas of the premises and in supporting facilities and equipment.

The price department of the State Council in conjunction with the State Council administrative department of construction is responsible for the supervision and management of the national property service charges. Price departments of local people’s governments at or above the county level, in conjunction with the same level of real estate administrative departments shall be responsible for the supervision and management of property service charges within the administrative region.

Property service charges should be set with reference to government-guided price or market-regulated price. The relevant price will be set according to the nature and characteristics of the property management services. The specific form of price-fixing shall be determined by the price departments of the local governments of provinces, autonomous regions, and municipalities directly under the central government in conjunction with the real estate administrative departments. Except for the government-guided price, the charges for property management services shall be subject to market-adjusted prices, and the detailed charging standards shall be determined by the property management enterprises, the property construction units, or owners through consultation.

According to the Measures for the Administration of Property Service Charges and relevant local regulations, where property service charges are priced under the guidance of the government, the government price authority in conjunction with the real estate authority shall set the benchmark price. The range of variation depends on the following factors, such as: 1. Certain types of property, which may include high-rise apartment buildings with lifts and low-rise apartment buildings without lifts. 2. Scope of service. It may specify different types of services, such as gardening, repair, and maintenance in common areas as well as lift maintenance. 3. The grading standards for property service charges. The prices and the variation range should be published regularly. The specific government’s guide price varies in different provinces and cities mainly according to the property type, the current situation of the local property management market, and the policies of local government departments on the property management market. As stipulated by Fujian Province, in addition to the guaranteed housing property service charges to implement the government guide price, other property service charges to implement market-regulated price. In Jiangsu Province, early property fees of public service and parking in ordinary residential areas will be charged according to the

–113– 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. REGULATORY OVERVIEW government guide price. After the establishment of the owners’ meeting, whether the property service charges to implement the government guide price was decided by the owners’ meeting. Non-ordinary residential, non-residential, services to meet the needs of some owners or accept the owners entrusted to carry out special services and other property services will be charged according to the market-adjusted price. On March 2019, Shanghai canceled the government- guided price for residential property to relax the price control on the local property management market. Property service charges are set by the market. Owners and property management enterprises can negotiate the agreed fee standard in the property management service agreement by themselves.

The owner and the property management enterprise can agree on the cost of property management services in the form of lump-sum system or remuneration system. The lump-sum system refers to the charging way in which the owner pays a fixed property service fee to the property management company and the property management company enjoys or bears the surplus or deficit. The remuneration system means that in the property service funds received in advance, the service fee is paid to the property management enterprise in accordance with the agreed proportion or amount, and the rest is all used for the expenditure agreed in the property service contract, but the balance or deficit are enjoyed or borne by the owner.

The property management enterprise shall, in accordance with the provisions of the price department of the government, clearly mark the price and charge the service fees, and publicize the service contents, service standards, charging items, charging standards, and other relevant information in a prominent place within the property management area.

According to the Regulations on Property Service Charges with Clear Price Marks(NDRC Price Inspection [2004] No. 1428), which was jointly promulgated by the National Development and Reform Commission and the former Ministry of Construction on July 19, 2004, and came into effect on October 1, 2004, when a property management enterprise provides services to the owners (including the property services provided in accordance with the realty service contract and other services entrusted by the owner), it shall clearly mark the price, indicate the service items, charging standards and other relevant information. When the charging standard changes, the property management enterprise shall adjust all relevant contents one month before the implementation of the new standard, and shall mark the date when the new standard starts to be implemented.

According to the Property Services Pricing Cost Monitoring Measures (Trial) (Development and Reform Price [2007] No. 2285) jointly promulgated by the National Development and Reform Commission and the former Ministry of Construction on September 10, 2007, and effective on October 1, 2007, the government price department formulates or adjusts the charge standard of property management, and the cost of property service pricing refers to the average cost of property service to the society verified by the government price department. The administrative department of real estate shall be responsible for the organization and implementation of the supervision and examination of the pricing cost of property management, and the administrative department of real estate shall cooperate with the administrative department of price in carrying out the work. Property service pricing cost shall

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At present, there is no unified government guideline price standard for property management service charges at the national level. According to the National Development and Reform Commission on the liberalization of some Notice of Opinions on Liberalization of Prices of Certain Services, published by the National Development and Reform Commission issued on December 17, 2014, and effective on the same day, Price control of property management services for non-affordable housing was removed. Provincial price authorities should work with the housing and urban-rural construction administrative departments in accordance with the actual situation, decided to implement government-guided prices for affordable housing, housing-reform house, old residential areas, and early property management service charges. The benchmark and floating range of these government’s guide prices vary from region to region. At present, most provincial governments are still implementing government’s guide prices for the fees charged for early property management service agreements, while price control over property management service fees charged by formal property management service contracts signed between property management service companies and owners’ associations is generally relaxed.

For example, in Guangdong Province, according to the Notice of Guangdong Price Bureau and Guangdong Department of Housing and Urban-Rural Development on Management Measures of Property Service Charges (Guangdong price [2010] No. 1), Property management charges shall be guided by the government or regulated by the market according to the nature and characteristics of different properties. The property management fees for the residential buildings (including the parking spaces and garages with self-owned property rights) before the establishment of the owners’ congress shall be guided by the government, while the service fees for villas, the residential buildings (including the parking spaces and garages with self-owned property rights) after the establishment of the owners’ congress and other non-residential properties shall be regulated by the market. According to the Notice on Further Standardizing Property Service Charges (Guangdong Development and Reform Commission Price Letter [2019] No. 2897) issued by Guangdong Development and Reform Commission and Guangdong Department of Housing and Urban-Rural Development and effective on August 1, 2019, the property service charges shall be subject to government’s guide prices, and the specific standards shall be determined by the property service enterprises through consultation with the owners within the government’s guide prices, and shall no longer be reported to the local development and reform departments for the record.

On December 25, 2020, the Ministry of Housing and Urban-Rural Development and other 10 departments jointly issued the Notice on Strengthening and Improving Residential Property Management (Building Regulations [2020] No. 10), which provides for the improvement of the property service price formation mechanism. Property service price is formed mainly through market competition, which is agreed by the owner and the property service enterprise in the

–115– 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. REGULATORY OVERVIEW property service contract and can be adjusted dynamically according to the service standard and price index. Advocate the remunerative system of accounting. The departments of urban housing and urban and rural construction shall publish a list of property services and define the contents and standards of property services. The property industry association should monitor and regularly publish the property service cost information and valuation rules for owners and property service enterprises to negotiate the property cost reference. Guide owners and property service enterprises to agree on the way of property service price adjustment through contract. Where the property service prices are set and guided by the government, the benchmark prices and their fluctuations should be published by the price department with the pricing authority and housing and urban and rural construction departments, at the same time, a dynamic adjustment mechanism should also be established.

Parking service fee

According to the Guiding Opinions on Further Improving the Policy on Charges for Motor Vehicle Parking Services (Development and Reform Price No. [2015] 2975) jointly issued and effective by the National Development and Reform Commission, the Ministry of Transport, and the Ministry of Housing and Urban-Rural Development on December 15, 2015, the state insists on market orientation, liberalizes the service charges of parking facilities with competing conditions in accordance with the law, and gradually reduces the scope of the government’s pricing management in parking services to encourage and guide social capital to build parking facilities. With the exception of the financial funds of the people’s governments at all levels and the investment of the Urban Construction Investment (Transportation Investment) Company, for the newly built parking facilities fully invested by other economic organizations, the operators shall independently set the charging standards according to the price laws and relevant regulations, market supply and demand and competition conditions. For those parking facilities with natural monopoly and public welfare characteristics, government pricing management needs to be implemented. The service fee also needs to be included in the local pricing directory, be clear in management authority, be standardized in pricing methods and procedures, and be effective in constraining the government pricing behavior. Encourage local governments to introduce differential charges for parking services in different areas, locations, vehicle types, and time periods based on their actual conditions.

Use of common parts to engage in business

In accordance with the property management regulations, those who use the common parts, facilities, and equipment of property to conduct business shall go through the relevant procedures after obtaining the consent of the relevant owners, the owners’ congress, and the property service enterprise. The profits obtained by the owners in common areas shall be mainly used to supplement the special maintenance funds, and may also be used in accordance with the decision of the owners’ meeting.

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According to the Civil Code, if the use of the common part is changed or the common part is used for business activities, the decision shall be made jointly by the owners and shall be voted on by owners of at least two-thirds of the area of the exclusive part and by owners of at least two-thirds of the number of owners participating in the vote, and agreed to by owners of at least three-quarters of the area of the exclusive part and by owners of at least three-quarters of the number of owners participating in the vote. The income generated by the use of the owners’ common share shall, after deduction of reasonable costs, be owned jointly by the owners. The property service enterprises shall regularly disclose to the owners in a reasonable way the operation and earnings of the part jointly owned by the owners and report to the owners’ and the owners’ committee assembly.

Outsourcing of property management services

According to the Property Management Ordinance (amended in 2018), a property management enterprise can outsource a certain service in the property management area to a specialized service enterprise, but cannot outsource the entire property management business in the area to a third party.

Fire fighting

According to the Fire Prevention Law of the People’s Republic of China promulgated by the Standing Committee of the National People’s Congress on April 29, 1998, and amended on October 28, 2008, and April 23, 2019, the property management enterprises of residential communities shall maintain and manage the common fire prevention facilities within their management areas and provide fire safety prevention services.

LEGAL REGULATION OF INTERNET INFORMATION SERVICES

According to the Measures for the Administration of Internet Information Services (Decree No. 588 of the State Council of the People’s Republic of China) promulgated and effective on 25 September 2000 and amended on 8 January 2011, Internet information services refer to the service activities of providing information to Internet users through the Internet, and are divided into two categories: operational and non-operational. Operational Internet information services refer to service activities which include provide paid information or web page production to Internet users through the Internet. Non-operational Internet information services refer to the service activities which provide open and shared information to Internet users through the Internet free of charge.

Those who engage in non-operating Internet information services shall be subject to filing procedures. Internet information service providers shall provide services in accordance with the licensed or filed items. Non-operating Internet information service providers shall not engage in paid services. Internet information service providers shall apply to the relevant government departments for approval or filing 30 days in advance if they change their service items, website URLs and other matters. Units which engage in non-operating Internet information services without fulfilling the filing procedures shall be ordered by the provincial telecommunication management agencies to rectify the situation within a certain period of time; if they refuse to do so, they shall be ordered to close the websites.

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According to the Regulations on the Administration of Mobile Internet Application Information Services issued by the State Internet Information Office on 28 June 2016 and implemented on 1 August 2016, the State Internet Information Office is responsible for the supervision, management and enforcement of the information content of mobile Internet applications nationwide, while local Internet information offices are responsible for the supervision, management and enforcement of mobile Internet applications within their administrative areas in accordance with their duties. The local Internet information offices are responsible for the supervision, management and enforcement of the information content of mobile Internet applications within their administrative regions in accordance with their responsibilities. The provision of information services through mobile Internet applications shall obtain relevant qualifications in accordance with the law. Mobile Internet application providers shall not use mobile Internet applications to engage in activities prohibited by laws and regulations, such as endangering national security, disturbing social order and infringing the legitimate rights and interests of others, and shall not use mobile Internet applications to produce, copy, publish or disseminate information content prohibited by laws and regulations.

According to the Cybersecurity Law of the People’s Republic of China (Decree No. 53 of the President of the People’s Republic of China), which was promulgated by the Standing Committee of the National People’s Congress on 7 November 2016 and effective on 1 June 2017, network operators shall follow the principles of lawfulness, justifiability and necessity in collecting and using personal information, disclose the rules of collection and use, express the purpose, method and scope of collecting and using information, and obtain the consent of the collected person. Network operators shall not collect personal information that is not related to the services they provide, and shall not collect or use personal information in violation of the provisions of laws and administrative regulations and the agreement between the two parties, and shall handle the personal information they keep in accordance with the provisions of laws and administrative regulations and the agreement with the users. Network operators shall not disclose, tamper with or damage the personal information they collect; Without the consent of the collected person, personal information shall not be provided to others. Network operators shall take technical measures and other necessary measures to ensure the security of personal information collected by them and prevent information disclosure, damage and loss. In the event of or possible occurrence of disclosure, damage or loss of personal information, they shall take remedial measures immediately, inform the users and report to the relevant competent departments in accordance with regulations. The Civil Code also clearly stipulates that the personal information of natural persons is protected by law. If any organization or individual needs to obtain personal information of others, it shall obtain and ensure information security in accordance with the law, and shall not illegally collect, use, process or transmit personal information of others, or illegally trade, provide or disclose personal information of others.

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LEGAL SUPERVISION OF REAL ESTATE BROKERAGE BUSINESS

According to the Law of the People’s Republic of China on Urban Real Estate Management (Decree No. 32 of the President of the People’s Republic of China) promulgated by the Standing Committee of the National People’s Congress on 5 July 1994 and effective on 1 January 1995 and finally amended on 26 August 2019, real estate intermediary service agencies include real estate consulting agencies, real estate price assessment agencies and real estate brokerage agencies. A real estate intermediary service agency shall meet the following conditions: (1) it has its own name and organization; (2) it has a fixed place of business; (3) it has necessary property and funding; (4) it has a sufficient number of professional staff; and (5) other conditions stipulated by laws and administrative regulations.

According to the Measures for the Administration of Real Estate Brokerage (Order No. 8 of the Ministry of Housing and Urban-Rural Development, National Development and Reform Commission and Ministry of Human Resources and Social Security) promulgated by the Ministry of Housing and Urban-Rural Development, the National Development and Reform Commission and the Ministry of Human Resources and Social Security on 20 January 2011, effective on 1 April 2011 and amended on 1 March 2016, real estate brokerage refers to the acts that real estate brokerage agencies and real estate brokers provide real estate intermediary and agency services to clients and collect commissions in order to facilitate real estate transactions. The establishment of real estate brokerage agencies and branches shall have a sufficient number of real estate brokers. Real estate brokerage agencies and their branches shall go to the competent housing and urban-rural construction (real estate) department for record within 30 days from the date of obtaining the business license.

LEGAL REGULATION RELATED TO LABOUR SECURITY

According to the Labour Law of the People’s Republic of China (Decree No. 24 of the President of the People’s Republic of China), promulgated by the Standing Committee of the National People’s Congress on 5 July 1994, effective on 1 January 1995 and finally amended on 29 December 2018, employers shall establish and improve rules and regulations in accordance with the law to ensure that workers enjoy labour rights and fulfil labour obligations. The employers shall establish and improve the labour safety and health system, strictly implement national labour safety regulations, prevent labour safety accidents and reduce occupational hazards. Labour safety and health facilities shall comply with relevant national standards. The employers shall provide workers with labour safety, health conditions and necessary labour protection supplies in accordance with national regulations, and workers engaged in occupational hazard operations shall undergo regular health checks. Workers engaged in special operations shall undergo special training and obtain special work qualifications.

The Labour Contract Law of the People’s Republic of China (Decree No. 73 of the President of the People’s Republic of China), promulgated by the Standing Committee of the National People’s Congress on 29 June 2007, effective on 1 January 2008 and finally amended on 28 December 2012, and the Regulations on the Implementation of the Labour Contract Law

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According to the Social Insurance Law of the People’s Republic of China (Decree No. 25 of the President of the People’s Republic of China) promulgated by the Standing Committee of the National People’s Congress on October 28, 2010 and effective on July 1, 2011 and amended on December 29, 2018, employees shall participate in basic pension insurance, basic medical insurance and unemployment insurance, and the employers and the employees shall jointly pay basic pension insurance premiums, medical insurance premiums and unemployment insurance premiums. Employees shall also participate in industrial injury insurance and maternity insurance, and the employers shall pay industrial injury insurance premiums and maternity insurance premiums, while employees shall not pay industrial injury insurance premiums and maternity insurance premiums. Employers shall apply to the local social insurance agency for social insurance registration in accordance with the provisions of the Social Insurance Law of the People’s Republic of China. If the employer does not apply for social insurance registration, the social insurance administrative department shall order it to make corrections within a time limit; If no correction is made within the time limit, the employer shall impose a fine of not less than one time but not more than three times the amount of social insurance premiums payable, and the directly responsible person in charge and other directly responsible personnel shall be fined not less than 500 yuan but not more than 3,000 yuan. If the employer fails to pay the social insurance premiums in full and on time, the social insurance premium collection agency shall order it to pay or make up within a time limit, and from the date of default, a late fee of 5/10000 shall be imposed on a daily basis; If it fails to pay within the time limit, the relevant administrative department shall impose a fine of not less than one time but not more than three times the unpaid amount.

According to the Reform Plan of National Tax and Local Tax Collection and Management System promulgated by the General Office of the CPC Central Committee and the General Office of the State Council of China on 20 July 2018, starting from January 1, 2019, various social insurance premiums such as basic pension insurance premiums, unemployment insurance premiums, maternity insurance premiums, industrial injury insurance premiums and basic medical insurance premiums, will be handed over to the taxation department for unified collection. According to the Circular on Doing a Good Job in Collection and Management of Social Insurance Fees in a Safe and Orderly Way (General Office of the State Administration of Taxation [2018] No. 142) promulgated by the General Office of the State Administration of Taxation and effective on 13 September 2018 and the Urgent Notice on Implementing the Spirit of the Executive Meeting of the State Council and Effectively Doing the Work of Stabilising the Collection of Social Insurance Premiums (Human Resources and Social Security Office

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Letter [2018] No. 142) promulgated by the Ministry of Human Resources and Social Security and effective on 21 September 2018 (Human Resources and Social Security Office Letter [2018] No. 246), local authorities responsible for collecting social security premiums shall not organize on their own the collective settlement of the historical social insurance premiums of enterprises. The Notice on Implementing Certain Measures to Further Support and Serve the Development of the Private Economy (Shui Zong Fa [2018] No. 174) promulgated and effective on 16 November 2018 by the State Administration of Taxation reiterated that taxation authorities at all levels shall not organize on their own to carry out centralized clearing of outstanding fees for previous years for contributors, including private enterprises.

According to the Regulations on the Management of Housing Provident Fund (Decree No. 710 of the State Council of the People’s Republic of China) promulgated and effective on 3 April 1999 and last amended on 24 March 2019, the housing provident fund paid and deposited by workers and staff themselves as well as that paid and deposited by units to which the workers and staffs belong is owned by the workers and staff themselves. A newly-established units shall undertake the registration of payment and deposit of housing provident fund at the managing center of housing provident fund within 30 days of its establishment and shall undergo the procedure of opening the accounts of the housing provident fund for its workers and staff within 20 days of registration. If a unit employs a new worker and staff, the unit shall undertake the registration of payment and deposit at the center of housing provident fund within 30 days of its establishment and shall undergo the procedure of opening or transferring the account of the housing provident fund for its workers and staff. A unit shall timely pay and deposit housing provident fund in full amount, and shall not pay and deposit it after the expiration of the time period or pay it not in full amount. Where a unit fails to make the payment and deposit registration of housing provident fund or fails to undergo the procedure for its workers and staff to open the housing provident fund account, the managing center of housing provident fund shall order it to be undertaken within a specified time limit; where it is not undertaken by the expiration of the specified time limit, a fine of not less than 10,000 yuan nor more than 50,000 yuan shall be imposed. Where a unit fails to pay or pays not in full amount the housing provident fund by the expiration of the time limit, the managing center of housing provident fund shall order it to be paid and deposited within a specified time limit; where it is not paid and deposited yet by the expiration of the specified time limit, compulsory enforcement by the people’s courts may be applied.

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LAWS AND REGULATIONS ON INTELLECTUAL PROPERTY RIGHTS

Trademark Law

Trademarks are protected by the Trademark Law of the People’s Republic of China (Decree No. 29 of the President of the People’s Republic of China) promulgated by the Standing Committee of the National People’s Congress on 23 August 1982, effective on 1 March 1983 and last amended on 24 April 2019, and the Regulations on the Implementation of the Trademark Law of the People’s Republic of China promulgated by the State Council on 29 April 2014 and effective on 1 May 2014 (Decree No. 651 of the State Council of the People’s Republic of China). The Trademark Office of the State Intellectual Property Office is in charge of trademark registration. The validity period of a registered trademark is ten years. If a registered trademark needs to continue to be used after the expiration of its validity period, the validity period of each renewal of registration shall be ten years. A trademark registrant may license others to use its registered trademark by entering into a trademark license contract. The licensor shall submit a copy of the trademark license contract to the Trademark Office for record.

In accordance with the Copyright Law of the People’s Republic of China promulgated by the Standing Committee of the National People’s Congress on 7 September 1990, implemented on 1 June 1991 and last amended on 11 November 2020 (Decree No. 62 of the President of the People’s Republic of China, the latest amended version of which will enter into force on 1 June 2021), and the Regulations on the Implementation of the Copyright Law of the People’s Republic of China promulgated by the State Council on 2 August 2002, implemented on 15 September 2002 and last amended on 30 January 2013 (Decree No. 633 of the State Council), the works of Chinese citizens, legal persons or unincorporated organizations are entitled to copyright in accordance with the law, regardless of whether they are published or not. The works of foreigners and stateless persons are entitled to copyright in accordance with the law if they are first published in China. The copyright of the works of foreigners or stateless persons shall be protected by the Copyright Law in accordance with the agreements signed between the country to which the author belongs or the country where he habitually resides and China or the international treaties to which he jointly participates. The copyright enjoyed by the works of foreigners and stateless persons in accordance with the agreements signed between the country to which the authors belong or the country where they habitually reside and China or the international treaties to which they are both parties shall be protected by the Copyright Law. The works of authors from countries that have not concluded agreements with China or jointly participated in international treaties, as well as works of stateless persons, which are published for the first time in a member state of an international treaty to which China is a party, or which are published simultaneously in a member state and a non-member state, are protected by the Copyright Law. Copyright holders enjoy a variety of personal and property rights, including the right of publication, authorship, reproduction and information network dissemination.

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Domain names

According to the Measures for the Administration of Internet Domain Names (Order No. 43 of the Ministry of Industry and Information Technology of the People’s Republic of China) promulgated by the Ministry of Industry and Information Technology on 24 August 2017 and effective on 1 November 2017, the Ministry of Industry and Information Technology is responsible for the administration of domain names on the Internet in China. Domain name registration services follow the principle of “first to apply for, first to register”. Applicants for domain name registration shall submit true, accurate and complete domain name registration information to the domain name authority and sign a registration agreement. Once the domain name registration is completed, the domain name registration applicant becomes the holder of the registered domain name.

RELEVANT TAX LAWS AND REGULATIONS

Enterprise income tax

In accordance with the Law of the People’s Republic of China on Enterprise Income Tax (Order No. 23 of the President of China) (“the Enterprise Income Tax Law”) promulgated by the National People’s Congress on 16 March 16, 2007, effective on 1 January 2008 and last amended on 29 December 29, 2018 and Regulations on the Implementation of Enterprise Income Tax Law (Order No. 714 of the State Council) (“Regulations on the Implementation of Enterprise Income Tax Law”) promulgated by the State Council on 6 December 2007, effective on 1 January 2008 and amended on 23 April 23 2019, all Chinese enterprises, foreign-invested enterprises and foreign enterprises that set up production and operation facilities in China are subject to enterprise income tax at the rate of 25%. These enterprises are classified into resident enterprises and non-resident enterprises. An enterprise established under foreign (regional) law but with its actual management body (meaning the body that exercises substantial overall management and control over the production and operation, personnel, finance, property, etc. of the enterprise) in China is considered a resident enterprise. Therefore, the 25% tax rate applies to income derived from within and outside of China.

According to the Enterprise Income Tax Law and Regulations on the Implementation of Enterprise Income Tax Law, dividends distributed to investors of non-resident enterprises (those that do not have an establishment or a place in China, or those that have an establishment or a place but the income obtained is not physically connected with their establishment or a place) are subject to a 10% advance tax in China, except for those who have reached an applicable tax agreement between the jurisdiction of non-resident enterprises and China that provide relief from the relevant tax. Similarly, any income that the investor obtains from the transfer of shares, if deemed to be income from sources within China, shall be taxed at the Chinese income tax rate of 10% or the lower tax treaty tax rate, if applicable.

The Mainland and Hong Kong Special Administrative Region’s Arrangements on Avoiding Double Taxation and Preventing Tax Evasion on Income promulgated by the State Administration of Taxation on 21August 21 2006 and effective on 8 December 2006, if the beneficiary of the dividend is a Hong Kong resident enterprise and the aforesaid enterprise directly holds at least 25% of the equity interest of a domestic company, the dividend distributed shall be taxed at a rate of 5%.

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According to the Announcement on Certain Issues Concerning Enterprise Income Tax on Indirect Transfer of Property by Non-Resident Enterprises (No. 7 Announcement of the State Administration of Taxation in 2015) (“No. 7 Announcement”), promulgated by the State Administration of Taxation and effective on 3 February 2015 and last revised on 29 December 2017, if a non-resident enterprise indirectly transfers the equity and other property of a Chinese resident enterprise through the implementation of arrangements that do not have reasonable commercial purposes to avoid the obligation to pay enterprise income tax, the indirect transfer shall be redefined and recognized as a direct transfer in accordance with the provisions of the Enterprise Income Tax Law. If the income from the indirect transfer of real estate or the income from the indirect transfer of equity shall be subject to enterprise income tax in accordance with the provisions of the Announcement, the unit or individual that is directly obliged to pay the relevant amount to the transferor in accordance with the relevant laws or contracts shall be the withholding agent. No. 7 Announcement also clearly stipulates the scope of application of indirect transfer of taxable property in China, as well as the relevant factors and conditions for judging reasonable business purposes, the requirements for the submission of documents and procedures for tax declarations, etc. The competent tax authorities shall investigate and adjust the indirect transfer of Chinese taxable property transactions in accordance with the general anti-avoidance regulations.

Value added tax

According to the Provisional Regulations of the People’s Republic of China on Value Added Tax (Order No. 691 of the State Council of the People’s Republic of China) promulgated by the State Council on 13 December 1993, effective on 1 January 1994 and last amended on 19 November 2017, and the Implementing Rules of the Provisional Regulations of the People’s Republic of China on Value Added Tax (Order No. 65 of the Ministry of Finance of the People’s Republic of China) promulgated by the Ministry of Finance of the People’s Republic of China on 25 December 1993 and amended on 15 December 2008 and 28 October 2011 (Order No. 65 of the Ministry of Finance of the People’s Republic of China) (collectively referred to as the Value Added Tax), a taxpayer who sells goods or processing, repair and fitting services, sales services, intangible assets, real estate and imports goods within the territory of China shall be subject to value added tax. A taxpayer who sells goods or processing, repairing and repairing services, sells services, intangible assets, real estate and imports goods in China is a value added tax payer and shall pay value added tax according to the Value Added Tax Law. Unless otherwise specified in the Value Added Tax Law, the tax rate for the sale of services or intangible assets by value added tax payers is 6%.

In addition, according to the Notice on Comprehensively Pushing Forward the Pilot Project of Changing Business Tax to Value Added Tax (Cai Shui [2016] No. 36) promulgated by the Ministry of Finance and the State Administration of Taxation on 23 March 2016 and effective on 1 May 2016, starting from 1 May 2016, a nationwide pilot project to change business tax to value added tax has been launched. All business tax taxpayers in construction, real estate, finance and life services have been included in the scope of the pilot project and been changed from paying business tax to paying value added tax.

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Urban maintenance and construction tax and education surcharge

According to the Notice on Unification of Urban Maintenance and Construction Tax and Education Surcharge System for Domestic and Foreign Enterprises and Individuals (Guo Fa [2010] No. 35) promulgated by the State Council on 18 October 2010 and effective on 1 December 2010, starting from 1 December 2010, the Provisional Regulations of the People’s Republic of China on Urban Maintenance and Construction Tax issued in 1985 and the Provisional Regulations on the Collection of Education Surcharge issued in 1986 shall also apply to foreign-invested enterprises. The Provisional Regulations on the Levy of Education Surcharge and the relevant rules and regulations issued by the State Council and the competent fiscal and taxation departments of the State Council since 1985 and 1986 are also applicable to foreign-invested enterprises, foreign enterprises and foreign individuals.

According to the Provisional Regulations of the People’s Republic of China on Urban Maintenance and Construction Tax (Order No. 588 of the State Council of the People’s Republic of China, “Provisional Regulations on Urban Construction Tax”) promulgated by the State Council on 8 February 1985 and effective on 1 January 1985 and amended on 8 January 2011, all units and individuals who pay consumption tax, value added tax and business tax (the State Council has repealed the Provisional Regulations of the People’s Republic of China on Business Tax on 19 November 2017, the same below) are subject to the urban maintenance and construction tax. Urban maintenance and construction tax, based on the actual amount of consumption tax, value added tax and business tax paid by units and individuals, shall be paid simultaneously with consumption tax, value added tax and business tax respectively. If the taxpayer is located in the urban area, the tax rate is 7%; If the taxpayer is located in a county or town, the tax rate is 5%; If the taxpayer is not located in an urban area, county seat or town, the tax rate is 1%.

On 11 August 2020, the Standing Committee of the National People’s Congress adopted the Urban Maintenance and Construction Tax Law of the People’s Republic of China (Order No. 51 of the President of the People’s Republic of China, the “Urban Construction Tax Law”), which will come into effect on 1 September 2021 and repeal the Provisional Regulations on Urban Construction Tax on the same date. According to the provisions of the Urban Construction Tax Law, all units and individuals who pay value added tax and consumption tax in the territory of the People’s Republic of China are taxpayers of urban maintenance and construction tax and shall pay urban maintenance and construction tax in accordance with the provisions of the Law. The urban maintenance and construction tax is based on the actual amount of VAT and consumption tax paid by the taxpayer according to the law, and the tax rate and the time of tax obligation are consistent with the Provisional Regulations on Urban Construction Tax.

According to The Provisional Regulations on the Levy of Education Surcharge (Order No. 588 of the State Council of the People’s Republic of China) promulgated by the State Council on 28 April 1986, effective on 1 July 1986 and last amended on 8 January 2011, the rate of education surcharge shall be 3% of the actual amount of consumption tax, value added tax and business tax paid by each unit and individual, and shall be paid simultaneously with consumption tax, value-added tax and business tax respectively.

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REGULATIONS ON FOREIGN EXCHANGE ADMINISTRATION

According to the Regulations of the People’s Republic of China on Foreign Exchange Administration (Decree No. 532 of the State Council) promulgated by the State Council on 29 January 1996, effective on 1 April 1996 and last amended on 5 August 2008, RMB is freely convertible under the current account (including dividend distribution, trade and service- related foreign exchange transactions), but not freely convertible under the capital account (including China’s overseas direct investment, loans, capital transfers and securities investments) and requires prior approval of the State Administration of Foreign Exchange.

According to the Notice on Reforming and Regulating the Management Policy of Capital Project Settlement (Huifa [2016] No. 16) issued by the State Administration of Foreign Exchange (SAFE) on 9 June 2016, the foreign exchange income from capital projects of domestic institutions shall be subject to the policy of willingness settlement of foreign exchange, i.e. the foreign exchange income from capital projects (including foreign exchange funds, foreign debt funds and repatriation of capital from overseas listing, etc.) that have been clearly implemented in relevant policies may be settled in banks according to the actual operating needs of domestic institutions. The percentage of willingness to settle foreign exchange income of domestic institutions under capital account is tentatively set at 100%, but the State Administration of Foreign Exchange may adjust the above percentage in due course according to the balance of payments situation. The relevant capital concerned shall not be used directly or indirectly for purposes outside the scope of business of the enterprise or prohibited by laws and regulations. Except as otherwise provided by laws and regulations, domestic enterprises shall not directly or indirectly use the relevant capital in securities investment or bank-guaranteed products other than investment and financial management. The relevant capital shall not be used to issue loans to non-affiliated enterprises (except for those expressly permitted by the scope of business) or for the construction or purchase of non-self-used real estate (except for real estate enterprises).

According to the Notice on Optimizing Foreign Exchange Management to Support Foreign-related Business Development (Huifa [2020] No. 8) issued by the State Administration of Foreign Exchange on 10 April 2020, on the premise of ensuring the true and compliant use of funds and complying with the current regulations on the use of capital account income, qualified enterprises are allowed to use capital account income such as capital, foreign debt and overseas listing for domestic payment without providing authenticity certification materials to banks one by one in advance. The handling bank shall conduct post-checking according to relevant requirements.

According to the Notice on Foreign Exchange Management of Overseas Investment and Financing and Return Investment of Domestic Residents through Special Purpose Companies (Huifa [2014] No. 37) (“No. 37 Document”) promulgated by the State Administration of Foreign Exchange on 4 July 2014 and effective on the date of promulgation, (1) Domestic residents (“domestic residents”) shall apply for foreign exchange with the local foreign exchange administration before making capital contributions to overseas special purpose companies (“overseas special purpose companies”) directly established or controlled by them

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According to the Notice on Further Simplification and Improvement of Foreign Exchange Administration Policies for Direct Investment (Huifa [2015] No. 13) promulgated by the State Administration of Foreign Exchange on 13 February 2015, effective on 1 June 2015 and amended on 30 December 2019, banks directly examine and handle the corresponding foreign exchange registration under domestic direct investment and foreign exchange registration under overseas direct investment in accordance with the provisions of No. 13 Document and relevant operational guidelines. The State Administration of Foreign Exchange and its branches indirectly supervise the foreign exchange registration of direct investment through banks.

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HISTORY AND DEVELOPMENT

Overview

We started to provide property management services back in 1997, when Tianli Property, one of the major operating subsidiaries of our Company, was established and later became the centralized management platform of our operations. In March 2020, Guangzhou Fuxing, the onshore holding company of our Group, acquired Tianli Property, subsequent to its acquisition of Datong Hengfu and Huaxing Property in December 2019. As part of the Reorganization, Guangzhou Fuxing became the indirect wholly-owned subsidiary of our Company.

Our business operation originates in Guangzhou and we have subsequently expanded our geographic coverage to the Greater Bay Area, the Yangtze River Delta Region, the Bohai Economic Rim, and other first-tier, new first-tier and core second-tier cities across the PRC. Over the last 24 years, we have significantly grown our business and operations. To date, our full spectrum service offering includes (i) residential property management services, which consist of property management services, value-added services to non-property owners, and community value-added services; and (ii) commercial property management services, which consist of basic property management services and commercial operational and value-added services. We were ranked 11th among the 2021 Top 100 Property Management Companies in China in terms of Overall Strength by CIA. We managed 552 property projects (including residential and non-residential properties) with an aggregated GFA under management of approximately 69.4 million sq.m. across the PRC as of December 31, 2020.

Over the years, Mr. Li and Mr. Zhang, our ultimate Controlling Shareholders, have not been involved in the daily operations and management of our Group. Our ultimate Controlling Shareholders had entrusted it to our management team given the past successful achievements in the management of our operation. In addition to the business of our Group, Mr. Li and Mr. Zhang have investments in industries including property development and investment and they hold various directorships in the aforementioned businesses. See “Relationship with Controlling Shareholders – Delineation of Business” for details.

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Business Development Milestones

The following events set forth the key milestones in the history of our business development:

Year Event

1997 Tianli Property, one of the major operating subsidiaries of our Company, was established.

We started providing residential property management services to properties developed by R&F Group in Guangzhou.

2002 We expanded our presence and started providing property management services in Beijing.

We were accredited the ISO9001:2000 quality management system certification.

2004 We were accredited the qualification of First Class Property Service Enterprise (一級物業管理企業資質) and the ISO14001:2004 environmental management system certification.

2006 We established the CBD Property Management Center and expanded to provide property management services to Grade A office complexes and serviced apartments.

2010 We started to offer the 400 national customer service hotline.

We were named as “Top Ten Property Management Companies in China” (中國物業服務企業十強企業)byCIA.

2013 Tianli Property acquired Beijing Hengfu Property and became the centralized management platform of our operations.

2017 We fully launched the Zizai Platform System (自在平台系統)to achieve intelligent and comprehensive service offerings.

We published the “Basic Standard of Property Management 1.0”, providing guidelines for standardized property management services.

2019 We were accredited the ISO45001:2018 occupational health and safety management system certification.

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Year Event

2020 We officially launched the Fuwu Shangqi (富物商企) brand under which we provide high-quality commercial operational and value- added services in respect of commercial properties.

Guangzhou Fuxing acquired Tianli Property and became the holding vehicle of all of our operating subsidiaries in the PRC

2021 We were ranked 11th among the 2021 Top 100 Property Management Companies in China in terms of Overall Strength by CIA.

Corporate Development

The major corporate developments of our subsidiaries which were material to our performance during the Track Record Period are set out below:

Guangzhou Fuxing

Guangzhou Fuxing was established in the PRC on December 11, 2019 with an initial registered capital of RMB310,000,000. Upon its establishment, Guangzhou Fuxing was owned as to 50% by Mr. Li and 50% by Mr. Zhang, our ultimate Controlling Shareholders. Guangzhou Fuxing is the holding vehicle of our Group which holds all operating subsidiaries in the PRC.

As part of the Reorganization, Guangzhou Fuxing became our indirect wholly-owned subsidiary. See “Reorganization” for details.

Tianli Property

Tianli Property was established in the PRC on December 10, 1997 with an initial registered capital of RMB1,000,000. It is engaged in the provision of property management services and related value-added services. Upon its establishment, Tianli Property was owned as to 50% by Guangzhou Tianli Properties Development Company (廣州天力房地產開發公司) (“Tianli Properties Development”), the predecessor of R&F Properties, and 50% by Guangzhou Tianhe Hi-tech Development Zone Tianli Construction Company (廣州天河高新開發區天力建築公司)(“Tianhe Tianli Construction”). Each of Tianli Properties Development and Tianhe Tianli Construction was controlled by Mr. Li and Mr. Zhang at the relevant time.

Subsequent to a series of increases in registered capital and equity transfers, as of December 10, 2019, Tianli Property became owned as to 90% by R&F Properties and 10% by Guangzhou Dingli Venture Capital Investment Co., Ltd. (廣州鼎力創業投資有限公司) (“Guangzhou Dingli”), a wholly-owned subsidiary of R&F Properties, with its registered capital being increased to RMB300,000,000.

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On March 31, 2020, Guangzhou Fuxing acquired (i) 90% equity interest of Tianli Property from R&F Properties at a consideration of RMB270,000,000 and (ii) 10% equity interest of Tianli Property from Guangzhou Dingli at a consideration of RMB30,000,000. The consideration was determined after arm’s length negotiation with reference to the registered and paid-up capital of Tianli Property at the relevant time and has been fully settled. Upon completion of the acquisition, Tianli Property became wholly owned by Guangzhou Fuxing.

Beijing Hengfu Property

Beijing Hengfu Property was established in the PRC on December 11, 2002 with an initial registered capital of RMB5,000,000. It is engaged in the provision of property management services and related value-added services. Upon its establishment, Beijing Hengfu Property was owned as to 50% by Beijing R&F City Properties Development Co., Ltd. (北京富力城房地產開發有限公司)(“Beijing R&F City”), and 50% by R&F (Beijing) Properties Development Co., Ltd. (富力(北京)地產開發有限公司)(“R&F Beijing”), both being wholly- owned subsidiaries of R&F Properties.

On July 31, 2013, Tianli Property acquired (i) 50% equity interest of Beijing Hengfu Property from Beijing R&F City at a consideration of RMB2,500,000 and (ii) 50% equity interest of Beijing Hengfu Property from R&F Beijing at a consideration of RMB2,500,000. The consideration was determined after arm’s length negotiation with reference to paid-up registered capital of Beijing Hengfu Property and has been fully settled. Upon completion of the acquisition, Beijing Hengfu Property became wholly owned by Tianli Property.

Fulin Commercial

Fulin Commercial was established in the PRC on June 15, 2020 with an initial registered capital of RMB50,000,000. It is primarily engaged in the provision of commercial operational and value-added services. Since its establishment, Fulin Commercial has been wholly owned by Tianli Property.

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REORGANIZATION

The following diagram illustrates our shareholding structure before the Reorganization:

Mr. Li Mr. Zhang

50% 50%

Guangzhou Fuxing (PRC)

100% 100% 100%

Huaxin Property Tianli Property Datong Hengfu (PRC) (PRC) (PRC)

100% 100% 100% 100% 100% 100% 100% 100% 100%

Hangzhou R&F Commercial Yueshanhu Property Beijing Hengfu Property Jifu Property Fulin Commercial Junxi Property Fuyun Property Fubo Property Fuyao Property (PRC) (PRC) (PRC) (PRC) (PRC) (PRC) (PRC) (PRC) (PRC)

100% 100% 100% Junxi Investment Hengfu Club Qifu Property (PRC) (PRC) (PRC)

In preparation of the [REDACTED], the following steps were implemented to establish our Group:

1. Incorporation of our Company

On December 24, 2020, our Company was incorporated in the Cayman Islands under the Companies Act as an exempted company with limited liability with an authorized share capital of HK$380,000 divided into 38,000,000 ordinary shares of HK$0.01 each. Upon its incorporation, one share was allotted and issued at par to an initial subscriber, being an Independent Third Party, which was transferred at par, fully paid, to Sun Arise on December 24, 2020. On the same day, one Share was allotted and issued at par, fully paid to each of Virtuous Charm, Prime Elegance, Jade Concord, Active Strength and Grand Favour. Upon completion of such allotment and issue, our Company became owned as to approximately 16.67% by each of Sun Arise, Virtuous Charm, Prime Elegance, Jade Concord, Active Strength and Grand Favour. Each of Jade Concord, Virtuous Charm and Prime Elegance is wholly owned by Mr. Li and each of Sun Arise, Active Strength and Grand Favour is wholly owned by Mr. Zhang.

On March 17, 2021, our Company allotted and issued 4,499, 4,999, 39,999, 4,499, 4,999 and 39,999 Shares at par, fully paid, to Jade Concord, Virtuous Charm, Prime Elegance, Grand Favour, Active Strength and Sun Arise, respectively. Upon completion of such allotment and issue, our Company became owned as to approximately 4.55% by Jade Concord, 5.05% by Virtuous Charm, 40.40% by Prime Elegance, 4.55% by Grand Favour, 5.05% by Active Strength and 40.40% by Sun Arise, respectively.

2. Incorporation of offshore holding companies

On October 19, 2020, Wealth Best Global was incorporated in the BVI with limited liability and is authorized to issue a maximum of 50,000 ordinary shares with a par value of US$1.00. On January 22, 2021, 100 shares of Wealth Best Global was allotted and issued at par to our Company. Upon completion of such allotment and issue, Wealth Best Global became wholly owned by our Company.

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On February 9, 2021, R&F Property Services HK was incorporated in Hong Kong with limited liability. As of the date of incorporation, 10,000 ordinary shares were issued to Wealth Best Global at a subscription price of HK$10,000. Upon completion of such issue, R&F Property Services HK became wholly owned by Wealth Best Global.

3. Acquisition of Guangzhou Fuxing and issue of new Shares by our Company

On April 14, 2021, R&F Property Services HK acquired the entire equity interest in Guangzhou Fuxing from Mr. Li and Mr. Zhang at a total consideration of RMB310,000,000 which was determined after arm’s length negotiations with reference to the paid-up registered capital of Guangzhou Fuxing. The consideration was settled by the allotment and issue by our Company of 500 Shares, credited as fully paid, to each of (i) Jade Concord, a company wholly owned by Mr. Li, and (ii) Grand Favour, a company wholly owned by Mr. Zhang. Upon completion of the acquisition, Guangzhou Fuxing became wholly owned by R&F Property Services HK.

PRE-[REDACTED] INVESTMENT

On April 11, 2021, Smart Up entered into a share transfer agreement with Jade Concord and Grand Favour, pursuant to which Smart Up agreed to purchase 3,523 Shares from each of Jade Concord and Grand Favour at a total consideration of the USD equivalent of RMB1,000,000,000. Details of the investment by Smart Up (the “Pre-[REDACTED] Investment”) are set out below:

Date of agreement April 11, 2021

Consideration USD equivalent of RMB1,000,000,000

Date of settlement of consideration April 22, 2021

Basis of consideration After arm’s length negotiations between the parties with reference to the business and financial prospects of our Group

Cost per Share(1) RMB[REDACTED] (approximately HK$[REDACTED])

Discount to the [REDACTED](2) Approximately [REDACTED]%

Use of proceeds Not applicable

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Shareholding in our Company immediately Approximately [REDACTED]% upon completion of the Pre-[REDACTED] Investment and the Reorganization

Shareholding in our Company immediately Approximately [REDACTED]% upon completion of the [REDACTED] (assuming the [REDACTED] is not exercised)

Strategic benefits to our Company Our Directors are of the view that the Pre-[REDACTED] Investment is beneficial to our Group as it can assist us in broadening our shareholder base and add value to the profile of our Company in view of Mr. Chen’s business network and experience

Notes:

(1) The approximate cost per Share is calculated based on the amount of consideration paid by the Pre-[REDACTED] Investor divided by the number of Shares to be held by it upon [REDACTED] (assuming the [REDACTED] is not exercised).

(2) The discount to the [REDACTED] is calculated based on the assumption that the [REDACTED]is HK$[REDACTED] per Share, being the mid-point of the indicative [REDACTED] range of HK$[REDACTED] to HK$[REDACTED].

2. Special Rights

None of Smart Up and its ultimate beneficial owner is entitled to any special rights under the Pre-[REDACTED] Investment.

3. Lock-up and Public Float

The Shares held by Smart Up will be subject to lock-up for a period of six months after [REDACTED].

Upon completion of the [REDACTED], the Shares held by Smart Up will be counted towards the public float of our Company.

4. Information on the pre-[REDACTED] investor

Smart Up is an investment holding company incorporated in the BVI and is wholly owned by Mr. Chen Sze Lok (陳思樂)(“Mr. Chen”). Mr. Chen is an entrepreneur and has been acquainted with our Group for many years as Mr. Li and Mr. Zhang are Mr. Chen’s family friends. To the best of our Directors’ knowledge, information and belief having made all reasonable enquiries, each of Smart Up and Mr. Chen is an Independent Third Party.

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5. Joint Sponsors’ Confirmation

The Joint Sponsors are of the view that the Pre-[REDACTED] Investment is in compliance with the Guidance Letter HKEx-GL29-12 issued by the Stock Exchange in January 2012 (as updated in March 2017), the Guidance Letter HKEx-GL43-12 issued by the Stock Exchange in October 2012 (as updated in July 2013 and March 2017), and the Guidance Letter HKEx-GL44-12 issued by the Stock Exchange in October 2012 (as updated in March 2017).

CORPORATE STRUCTURE UPON COMPLETION OF THE REORGANIZATION

The following chart sets forth our corporate and shareholding structure upon completion of the Reorganization and immediately prior to the Capitalization Issue and the [REDACTED]:

Mr. Li Mr. Zhang

100% 100% 100% 100% 100% 100%

Virtuous Charm Prime Elegance Jade Concord Active Strength Sun Arise Grand Favour Smart Up (BVI) (BVI) (BVI) (BVI) (BVI) (BVI)

5.00% 40.00% 1.48%5.00% 40.00%1.48% 7.05%

Our Company (Cayman Islands)

100%

Wealth Best Global (BVI)

100%

R&F Property Services HK (Hong Kong)

100%

Guangzhou Fuxing (PRC)

100% 100% 100%

Huaxin Property Tianli Property Datong Hengfu (PRC) (PRC) (PRC)

100% 100% 100% 100% 100%100% 100% 100% 100%

100% 100% 100%

Hengfu Club Qifu Property Junxi Investment (PRC) (PRC) (PRC)

Note: Certain percentage figures included in the chart above were subject to rounding adjustments.

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CORPORATE STRUCTURE UPON COMPLETION OF THE CAPITALIZATION ISSUE AND THE [REDACTED]

The following chart sets forth our corporate and shareholding structure upon completion of the Capitalization Issue and the [REDACTED] (assuming the [REDACTED]isnot exercised):

Mr. Li Mr. Zhang

100% 100% 100% 100% 100% 100% Virtuous Charm Prime Elegance Jade Concord Active Strength Sun Arise Grand Favour Smart Up Other public Shareholders (BVI) (BVI) (BVI) (BVI) (BVI) (BVI) [REDACTED]% [REDACTED]% [REDACTED]% [REDACTED]% [REDACTED]% [REDACTED]% [REDACTED]% [REDACTED]%

Our Company (Cayman Islands)

100%

Wealth Best Global (BVI)

100%

R&F Property Services HK (Hong Kong)

100%

Guangzhou Fuxing (PRC)

100%100% 100% Huaxin Property Tianli Property Datong Hengfu (PRC) (PRC) (PRC)

100% 100% 100% 100% 100% 100% 100% 100% 100% Hangzhou R&F Yueshanhu Beijing Hengfu Jifu Property Fulin Commercial Junxi Property Fuyun Property Fubo Property Fuyao Property Commercial Property Property (PRC) (PRC) (PRC) (PRC) (PRC) (PRC) (PRC) (PRC) (PRC)

100% 100% 100%

Hengfu Club Qifu Property Junxi Investment (PRC) (PRC) (PRC) Note: Certain percentage figures included in the chart above were subject to rounding adjustments.

PRC REGULATORY REQUIREMENTS

Our PRC Legal Advisors have confirmed that all applicable regulatory approvals in relation to the equity transfers in respect of the PRC companies as described above have been obtained, the equity transfers have been properly and legally completed, and the procedures involved have been carried out in accordance with applicable PRC laws and regulations.

The Rules on the Mergers and Acquisitions of Domestic Enterprises by Foreign Investors in the PRC

According to the Rules on the Mergers and Acquisitions of Domestic Enterprises by Foreign Investors in the PRC (the “M&A Rules”), where a domestic company, enterprise or natural person intends to acquire its or his/her related domestic company in the name of an offshore company which it or he/she lawfully established or controls, the acquisition shall be subject to the examination and approval of the MOFCOM, and where a domestic company or natural person holds an equity interest in a domestic company through an offshore special purpose company by paying the acquisition price with equity interests, the overseas listing of that special purpose company shall be subject to approval by the CSRC.

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Pursuant to the Measures for the Reporting of Foreign Investment Information (《外商投資信息報告辦法》) (the “Foreign Investment Information Measures”), since January 1, 2020, for foreign investors carrying out investment activities directly or indirectly in the PRC, the foreign investors or foreign-invested enterprises shall submit investment information to the commerce authorities pursuant to these measures.

As advised by our PRC Legal Advisors, the acquisition of the entire equity interest of Guangzhou Fuxing by R&F Property Services HK (the “Acquisition”) was a change of shareholders of a foreign-invested enterprise. Therefore, the M&A Rules are not applicable to the Acquisition. Instead, the Acquisition shall comply with the Foreign Investment Information Measures. Guangzhou Fuxing has submitted investment information through the unified platform of the Business System of the MOFCOM (商務部業務系統統一平臺)forthe Acquisition and completed the registration of the change of shareholders for the Acquisition pursuant to the Foreign Investment Information Measures, and obtained the new business license in April 2021.

SAFE Registration in the PRC

Pursuant to the Circular on the Administration of Foreign Exchange Involved in the Investment and Financing and Round-trip Investment Conducted by PRC Residents via Special Purpose Vehicles 《 (關於境內居民通過特殊目的公司境外投融資及返程投資外匯管理有關問題的通知》)(“SAFE Circular No. 37”) issued by SAFE on July 4, 2014, where the PRC individual residents conduct investment in offshore special purpose vehicles with their legitimate onshore and offshore assets or equities, they must register with local SAFE branches with respect to their investments. SAFE Circular No. 37 also requires the PRC residents to file changes to their registration where their offshore special purpose vehicles undergo material events such as the change of basic information including PRC residence, name and operation period, as well as capital increase or decrease, share transfer or exchange, merger or division.

As Mr. Li and Mr. Zhang are Hong Kong permanent residents, our PRC Legal Advisors confirmed that they are not the PRC residents defined under SAFE Circular No. 37, and SAFE Circular No. 37 is not applicable.

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OVERVIEW

We provide diversified services through two business lines: residential property management services and commercial property management services. Our diverse property portfolio comprises residential and commercial properties, which primarily include retail properties, office buildings and serviced apartments. Other commercial properties that we were contracted to manage include education institutes and industrial parks. As of December 31, 2020, we managed 552 property projects located in 102 cities in 26 provinces, autonomous regions and municipalities across the PRC with a total GFA under management of 69.4 million sq.m., comprising residential properties with a GFA under management of 58.1 million sq.m. and commercial properties with a GFA under management of 11.2 million sq.m. As of the Latest Practicable Date, our total GFA under management further increased to 71.6 million sq.m.

We achieved robust growth during the Track Record Period. Our total GFA under management increased by 17.9% from 48.7 million sq.m. as of December 31, 2018 to 57.4 million sq.m. as of December 31, 2019, and further increased by 20.9% to 69.4 million sq.m. as of December 31, 2020. Our revenue increased by 19.0% from RMB1,823.4 million for the year ended December 31, 2018 to RMB2,170.1 million in 2019, and further increased by 19.7% to RMB2,597.4 million in 2020. In 2018, we recorded a loss for the year of RMB11.6 million. For further details, please refer to “Financial Information – Results of Operations – Year Ended December 31, 2019 Compared to Year Ended December 31, 2018”. Our profit for the year increased by 275.6% from RMB63.8 million in 2019 to RMB239.8 million in 2020.

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COMPETITIVE STRENGTHS

A leading comprehensive property management service provider in the PRC and a pioneer in utilizing technologies to empower services for urban development and community living

We are a leading comprehensive property management service provider in the PRC, offering a wide range of high-quality property management services and commercial operational services. According to CIA, we were ranked 11th among the 2021 Top 100 Property Management Companies in China in terms of overall strength; in 2019, we were ranked 2nd among the 2021 Top 100 Property Management Companies headquartered in the Greater Bay Area in terms of the number of commercial properties under management, and 7th among the Top 100 Property Management Companies headquartered in the Greater Bay Area in terms of GFA under management of commercial properties. In addition, we were named by CIA in 2021 as one of the China Special Property Management Exceptional Companies—Exceptional Commercial Property Management Service Companies (中國專項物業服務優秀企業—商業物業管理優秀企業) in recognition of our capabilities in managing commercial properties.

Over the years, we have established a brand image and reputation for high-quality services. According to CIA, our brand value was approximately RMB4.0 billion in 2020, and we were named one of the Top 100 China Property Service Leading Enterprises in terms of customer satisfaction in 2021. Our R&F Property Happiness Butler System (富力物業幸福管家體系) was awarded the Property Quality Service Brand in China in 2020 by CRIC China Property Management Research. The Guangzhou R&F Center, Guangzhou R&F Yingkai Square (廣州富力盈凱廣場) and Guangzhou R&F Yingtai Square (廣州富力盈泰廣場) under our management won the “National Model Building for Property Management (全國物業管理示範大廈)” award issued by the Ministry of Housing and Urban-Rural Development; and Guangzhou R&F Aristocratic House, Guangzhou R&F Tianlang Mingju (廣州富力天朗明居) and Tianjin R&F Tianlinyuan (天津富力天霖園) under our management won the “National Model Community for Property Management (全國物業管理示範小區)” award issued by the Ministry of Housing and Urban-Rural Development.

Since our inception in Guangzhou in 1997, we have established an extensive, nationwide service network with a focus on the Greater Bay Area and other key regions in the PRC such as the Yangtze River Delta Region and the Bohai Economic Rim. According to CIA, the Greater Bay Area, the Yangtze River Delta Region and the Bohai Economic Rim are densely populated and economically prosperous regions in China, with per capita disposable income and urbanization rate higher than the average level in China. As of December 31, 2020, our GFA under management in the Greater Bay Area, the Yangtze River Delta Region and the Bohai Economic Rim amounted to 15.7 million sq.m., 7.2 million sq.m. and 27.7 million sq.m., respectively, representing 22.7%, 10.4% and 39.9%, respectively, of our total GFA under management. We expect to continue to benefit from growth opportunities in these key regions by leveraging our market position and brand reputation as well as our widely recognized operating track record in these regions.

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In addition, we are a pioneer in the Chinese property management industry in using technologies to empower services for urban development and community living, and we took the lead in building smart communities in China through technological means. By continuously upgrading and iterating our management tools and applying them to both the residential and non-residential properties under our management, we expect to improve the quality of our services, explore the possibilities of reshaping property management services and accelerate the development of smart communities through technological means.

With our leading market position, nationwide service network and multidisciplinary capabilities in property management services and commercial operational services, we expect to continue to benefit from the rapid development of the property management and commercial operational services industry in the PRC, which will enable us to achieve stable and sustainable growth.

We have strong property management and commercial operational capabilities, and are one of the standard-setters of commercial operational services in the PRC as well as a frontrunner in integrated management services of urban renewal projects

We have industry-leading capabilities in providing residential property management services, commercial property management services and commercial operational services. We are also widely recognized as one of the standard-setters of commercial operational services.

Strong property management and commercial operational capabilities

We have strong capabilities in providing comprehensive and high-quality residential property management services and value-added services, and we strive to build smart communities:

• We have established a standardized operation and service system covering all aspects of community life, which allows us to achieve standardized, flat and delicacy management. Such standardized system enables us to ensure service quality and reduce reliance on manual labor. For example, we standardize our online work allocation pursuant to our “Zizai Internet Inspection Standard (自在互聯網巡查標準)”, and we assigne inspection jobs to on-site staff on a regular and quantifiable basis to more accurately control the number of on-site staff needed as well as the quality of on-site inspections. We empower basic property management services with innovative technologies to improve service quality and management efficiency.

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• We provide a wide array of community value-added services to residents to meet their various needs for clothing, food, housing and transportation. In 2018, 2019 and 2020, the revenue for our community value-added services amounted to RMB72.3 million, RMB90.0 million and RMB92.8 million, respectively, representing a CAGR of 13.3%.

• The residential communities under our management won numerous awards. For example, as of December 31, 2020, three communities under our management won the “National Model Community for Property Management (全國物業管理示範小區)” award issued by the Ministry of Housing and Urban-Rural Development, and 35 communities under our management won various provincial awards, reflecting our strong residential property management capabilities.

In addition, we have industry-leading capabilities in providing comprehensive and diversified commercial property management services and commercial operational services in China:

• Our services cover the entire lifecycle of commercial properties, which primarily consist of preliminary planning and design consultancy, tenant sourcing, and commercial property management and operational services. In the preliminary stage of a project, we conduct market research and in-depth analysis of the project’s position and characteristics as well as customers’ needs to form an operation and management plan that suits the project. After a project’s opening, we provide high-quality commercial property management services, including security, cleaning, repair and maintenance services, to ensure all facilities function properly and safely and to create a comfortable environment for customers.

• We have extensive experience in managing numerous landmark projects and are one of the few commercial operational service providers in China with the expertise and capability to manage a diverse retail and commercial property portfolio. Our commercial properties are mainly located in the core areas of first-tier, new first-tier and second-tier cities, and the property types primarily include Grade A office buildings, serviced apartments and retail properties. Some of the landmark projects that we manage include super grade A office buildings such as Guangzhou R&F Center (廣州富力中心), Guangzhou Yingtai Plaza (廣州盈泰廣場), Guangzhou Yingkai Plaza (廣州盈凱廣場), Guangzhou Xintiandi Center (廣州新天地中心), Guangzhou Yingxin Building (廣州盈信大廈), and Beijing R&F Center (北京富力中心), and commercial complexes such as Guangzhou R&F Haizhu City (廣州富力海珠城).

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• As of the Latest Practicable Date, we managed a wide range of commercial properties, such as Guangzhou R&F International Airport Logistic Park which covers multiple types of warehouses including ramp-up warehouses, elevator warehouses and refrigeration warehouses, and serves many domestic well-known pharmaceutical groups, e-commerce giants, logistics leading enterprises and other customers; meanwhile, we manage a number of cultural and tourism projects, such as Huizhou R&F Hot Spring Village at Longmen, Huizhou R&F Bayshore and Hainan R&F Mangrove Bay. We have experience in the whole chain management of cultural tourism projects and the ability to provide basic property management, investment promotion and operation services for cultural tourism projects throughout their lifecycle.

• We have a high profile tenant base, including over 5,000 international and domestic well-known enterprises from various industries, over 10 Fortune Global 500 companies, over 30 Fortune China 500 companies, and consulates of 20 countries in China. We have built good relationships with various clients. Our high-quality tenant resources help the commercial properties under our management achieve high occupancy rates, allow us to optimize the tenant mix of our commercial properties, and improve customer satisfaction as well as profitability of commercial properties.

A standard-setter of commercial operational services in the PRC

We are one of the standard-setters of commercial operational services in the PRC. We published the “Basic Standard of Property Management 1.0” (the “Standard”) in March 2017, providing guidelines for standardized property management services. We subsequently released the Standard 2.0, Standard 2.1 and Standard 3.0 in January 2018, March 2019 and January 2021, respectively, expanding the applicability of the Standard to the entire lifecycle of property management services, including diverse types of properties like residential properties, commercial properties and resorts, and clarifying managerial authority and responsibility by dividing management into three levels, namely the Group, regional companies, and local companies. As of December 31, 2020, three properties under our management were awarded National model buildings for property management (中國物業管理示範大廈) by the Ministry of Housing and Urban-Rural Development, 12 properties were awarded provincial model buildings for property management (省級物業管理示範大廈), 13 properties were awarded municipal model buildings for property management (市級物業管理示範大廈), 11 properties were awarded commercial buildings with the highest brand value in China (中國樓宇經濟最具品牌價值商業樓宇) and 11 properties were included in Guangzhou’s sustainable development index (廣州市可持續發展指數).

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A frontrunner in integrated management services of urban renewal projects in China

Leveraging our strong property management and commercial operational capabilities, and benefiting from R&F Group’s leading position in the urban renewal sector, we manage a number of large-scale, landmark urban renewal projects, such as New World Garden (新天地花園) and Yingxi Garden (盈禧花園) in Guangzhou.

Large-scale urban renewal projects are urban complexes that are diverse in business form, and may comprise residential properties, office buildings, shopping malls, hotels, serviced apartments, and other cultural, education and healthcare properties. The total GFA of a single project usually ranged from 1.0 million to 3.0 million sq.m., with approximately 20,000 to 100,000 owners and tenants, which provide rich business opportunities and a relatively high entry threshold. Our strong property management and commercial operational capabilities enable us to fully grasp the opportunities of urban renewal projects, through which we help create landmark projects, enhance the life quality of local residents, and generate diversified and sustainable income. For details on the scale of R&F Group’s urban renewal projects, please see “– Strong support from R&F Group lays a solid foundation for our stable and sustainable growth.”

We believe that leveraging our strong property management and commercial operational capabilities, and our position as a standard-setter of commercial operational services as well as a frontrunner in the urban renewal sector, we can tap into different channels to diversify our revenue streams.

Our diversified service offerings and all-around service ecosystem

We are committed to providing solutions to meet the needs of all customers of the properties under our management. To fulfill our commitment, we have built an all-around life service and enterprise service ecosystem through cooperating with partners.

For commercial properties, the large commercial property portfolio that we manage enables us to develop an in-depth understanding of commercial property tenants’ diverse needs, which in turn allows us to build an all-around enterprise service ecosystem. Due to the complexity, professionalism, technological advancement, different corporate structure, and changes in working environment involved in modern corporate management, our customers’ demand have far exceeded the scope of traditional basic property management, and they seek more comprehensive, one-stop-shop enterprise service solutions. For example, we observed that an increasing number of companies attempted to reduce costs and improve operational efficiency through subcontracting. To meet such demand, we launched the “Fuwu Shangqi (富物商企)” brand to provide comprehensive one-stop enterprise service solutions, which primarily consist of (i) space optimization, including office renovation and interior furnishing services; (ii) environmental maintenance, including greening, air purification and professional cleaning services; and (iii) office administration, including security consultancy, communication optimization, office equipment rental and sale, and conference services. As of the Latest Practicable Date, we had provided enterprise service solutions to various clients such as large state-owned banks, national joint-stock banks, consulates, government agencies,

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Fortune 500 companies, renowned retail brands, medical institutions and other large corporations through Fuwu Shangqi, and have established a comprehensive enterprise service ecosystem. We have also launched a series of value-added services for corporate employees. For example, we offered affordable and high-quality products to employees who worked in the office buildings under our management. During the Track Record Period, our revenue from providing commercial operational and other value-added services amounted to RMB143.4 million, RMB160.4 million and RMB181.8 million, respectively, representing a CAGR of 12.6%. We believe that our strong and comprehensive enterprise service ecosystem can help our customers improve operational efficiency, thereby enhancing our customer satisfaction and customer reliance on our services, increasing our revenue from commercial operational services.

For residential properties, we provide comprehensive services to meet property owners’ and residents’ needs for clothing, food, housing and transportation. To create a more convenient living experience for our customers and to diversify our revenue from different value-added services, we built an all-around life service ecosystem to provide one-stop life service solutions. Our life services cover home decoration, interior furnishing, home maintenance and other home improvement services. We also provided convenience services on property owners’ and residents’ demand, such as housekeeping and cleaning, community group purchase, and fresh food distribution services, as well as other services related to asset management to help property owners and residents preserve the value of their assets. During the COVID-19 pandemic in 2020, we expanded our fresh food purchase and delivery services in communities under our management across China. We also expanded our value-added life services to other property types under our management, including tourism sites healthcare facility, and warehouses to enrich our ecosystem.

We are committed to providing diversified services through not only our own operations, but also cooperation with R&F Group and third-party partners to realize network effect, introduce more services and products, and create greater value for property owners, residents and retail customers. For example, our Zizai Platform System (自在平台系統) provides diversified community value-added services to property owners and residents by connecting them to a large pool of resources. As of December 31, 2020, about 170 service providers had connected to our “Zizai platform” system and become our important partners in providing diversified community value-added services.

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We believe that our diversified service portfolio, all-around service ecosystem and convenient service platform can bring users a better experience, increase user loyalty, enable us to explore business models, identify more business opportunities, diversify our revenue sources and promote our long-term growth.

Strong support from R&F Group laying a solid foundation for our stable and sustainable growth

Our long-term and stable business relationship with R&F Group provides us with opportunities for continuous development and rapid growth. As a leading property developer in the PRC, R&F Properties was established in 1994 and was successfully listed on the main board of the Hong Kong Stock Exchange (stock code: 2777.HK) in 2005. Since 2015, R&F Properties has been ranked top ten in the “Top 500 Real Estate Enterprises in China” published by the China Real Estate Association and China Real Estate Appraisal for six consecutive years.

After over 20 years of continuous development, R&F Group has established nationwide strategic presence in China. Since 2013, R&F Group had begun expanding to foreign countries such as the United Kingdom, Australia and Malaysia. As of December 31, 2020, R&F Group had 208 projects under development located in over 140 cities in 27 provinces, autonomous regions and municipalities across the PRC and four overseas countries. R&F Group also strategically entered into other business sectors, with respect to hotels, logistics, culture and tourism sites, and elderly care facilities, providing us a foundation of diversified development and various business opportunities, reducing our operational risk due to our focus on a single business sector, strengthening our resistance against potential negative impact as a result of macroeconomic policies that are unfavorable to the property management industry.

In addition, R&F Group has an abundant land bank. As of December 31, 2020, R&F Group’s total land bank amounted to approximately 64.3 million sq.m., mainly located in first-tier, new first-tier and second-tier cities in China. As of December 31, 2020, R&F Group also owned 136 luxury hotels with 91 luxury hotels in operation and 45 luxury hotels under development.

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R&F Properties is also a leader in the urban renewal sector in the PRC. R&F Properties has established the R&F Urban Renewal Group (富力城市更新集團) with a dedicated team of talented professionals with rich experience in the urban renewal sector. As of December 31, 2020, R&F Properties owned over 60 contracted large-scale urban renewal projects across China. Typically such urban renewal projects are complex projects with huge capacity and various property types, to which we are well positioned to provide high-quality and comprehensive property management services.

During the Track Record Period, we provided property management services to substantially all of the properties developed by R&F Properties, and our bidding success rate for the properties developed by R&F Properties for which we provided commercial property management services was 100.0% during the Track Record Period. We believe that our long-term and stable strategic relationship with R&F Properties, coupled with our leading market position in the Greater Bay Area, the Yangtze River Delta and the Bohai Economic Rim as well as our comprehensive property management service capabilities, will position us to benefit from R&F Properties’ rich land bank, which will in turn enhance the synergy between R&F Properties and us.

A pioneer in the integration of technology in property management services in the PRC with industry-leading technological capabilities

As one of the first property management companies in the PRC to introduce, embrace and develop Internet, Internet-of-Things, big data and cloud system related technologies, we are a pioneer in integrating technology to build smart communities, enhancing service quality, improving customer service, managing assets and human resources and overseeing financial performance. We attach great importance to the use of technology to enhance our customers’ experience, and are committed to using technology to empower our services. We believe that the use of technology will help us improve service quality and customer satisfaction, reduce human errors, lower labor costs, and ultimately improve our financial performance.

We have been exploring the use of technology to empower our property management services since 2012. In 2012, we fully implemented the QPI Verification System. Coupled with the hand-held terminals distributed by us to our manager-level staff, the QPI Verification System enables us to achieve wireless mobile office, wireless verification, online data transmission, automatic data aggregation and sorting, and automatic output of assessment and evaluation report by module. Leveraging the various functions of hand-held terminals, such as audio and video forensics, we improved the traditional management method and our property service quality with the support of the QPI Verification System.

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In 2016, we implemented the Zizai Cloud (自在雲) smart property management platform. The Zizai Cloud can systematically integrate customer service scenarios in the front office, property management scenarios in the middle office, and data monitoring and analysis in the back office to achieve diversified, intelligent, personalized and real-time property management and efficient information flow. Through the Zizai Cloud, we can monitor the work status of each stage of our property management services in real time, use big data for operation analysis, provide more valuable decision-making basis to our management, and create more convenient services for our customers. Based on the Zizai Cloud, we launched the Zizai Platform System (自在平台系统) in 2017, and gradually enriched its features and enhanced its functionality over the years. As of December 31, 2020, the Zizai Platform System was connected to all projects under management, with more than 1.8 million registered users, and maintained an average annual new user growth of 0.5 million. As of December 31, 2020, the number of monthly active users on the Zizai Platform System reached 0.2 million, covering more than 270 communities. In 2020, through our Zizai Platform System, our customers processed about 0.6 million online payments for property management services and 6.8 million payments for temporary parking, representing an increase of over 75.0% and 90.0%, respectively, as compared to that in 2019.

In addition to the Zizai Platform System, we also innovatively came up with the concept of the “smart system hexagon”, which comprises smart carpark system, smart access control system, smart security system, AI monitoring system, mobile fee collection system and mobile property management system. Empowered by the “smart system hexagon”, we optimized our quality management, customer service and financial management. Leveraging the Internet-of- Things and big data, the “smart system hexagon” helped us to achieve effective control of personnel and management costs, and promote the building of smart communities.

High-quality service leading to high customer satisfaction and brand reputation

We believe that service quality is one of our core competitiveness, as such, we promote refined, regulated and standardized management and services. We provide professional and high-quality property management services through procedural workflow, digitalized operation and standardized management. We treat customers’ needs as the starting point and their satisfaction as the goal, and continuously provide the best experience to our customers. For example, our “R&F butler team” serves as the key nodes of our property management services, providing personalized butler services around the clock to efficiently meet customers’ demands and resolve customers’ problems. We have established a multi-channel communication system with customers, and formulated the response standards of customer complaint with strict

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Our prioritization of service quality has been widely recognized by the industry and our customers. Driven by our refined, regulated and standardized management and operation system, the customer satisfaction rate for our property management services has been steadily increasing over the years. According to survey conducted by Beijing FG Consulting Co., Ltd. (賽惟諮詢公司), an independent third-party market research firm, the customer satisfaction rate for our property management services provided to residential properties in 2020 was 88.0%, representing a 2.0% increase as compared to 2019, and was substantially higher than the industry average of 73.0%. The customer satisfaction for our property management services provided to office buildings has consistently maintained a leading position in the PRC, and was 99.0% in respect of customer satisfaction in 2020. As of December 31 2020, six projects under our management won national awards issued by the Ministry of Housing and Urban-Rural Development and 41 projects under our management won provincial awards. According to CIA, the brand value of “R&F Property Management” reached RMB4.0 billion.

Benefiting from our high customer satisfaction rate, we have relatively high pricing flexibility for our services. In 2019, our average property management fee for residential properties was RMB2.42 per sq.m. per month and our average property management fee for commercial properties was RMB10.01 per sq.m. per month, both of which were significantly higher than the average property management fees of the Top 100 Property Management Companies in China, with residential and commercial property management fees of which being RMB2.09 per sq.m. per month and RMB4.40 per sq.m. per month, respectively. In addition, we achieved a high property management fee collection rate and retention rate, which greatly enhanced the sustainability and profitability of our business. Our property management fee collection rate for the Track Record Period was 90.0%, 89.7% and 91.0%, respectively, which were higher than the average industry; our retention rate for property management services agreements for the same period was 100.0%, 100.0% and 99.8%, respectively. The high customer satisfaction rate is also conducive to the expansion of our diversified value-added services. In 2018, 2019 and 2020, the revenue that we generated from our value-added services to residential property owners amounted to RMB72.3 million, RMB90.0 million and RMB92.8 million, respectively, representing a CAGR of 13.3%.

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Experienced and visionary founders and management team, and well-established motivation mechanism and talent cultivation system

Our founders and controlling shareholders, Mr. Li Sze Lim and Mr. Zhang Li, are well-known business leaders in China with more than 25 years of experience in the real estate industry and have extensive understanding of the industry. Their visionary insight and leadership support were fundamental to our strategic development.

We have a stable management team with extensive professional knowledge and over 12 years of average working experience in the property management, commercial operation and real estate industries. Their industry experience and management capabilities laid the foundation for our rapid growth while providing quality services. For example, our executive director and deputy chairman of the board, Mr. Hu Jie (胡傑), has more than 20 years of experience in the industry, and is currently mainly responsible for formulating the polices for the Group. Mr. Lei Daqian (雷大乾), our general manager, has more than 20 years of experience in the industry, and is currently mainly responsible for formulating the polices for the Group. We believe that our management team’s insights into the industry and the history as well as the operation of our company will continue to lead us to success. We also have a team of employees who are energetic and educated. The majority of our non-management employees in our residential property business department and commercial business department have a bachelor’s degree or higher.

Moreover, we pay attention to the professional training of our employees and have a well-developed and efficient training system. In 2020, we carried out a total of 110 trainings at the group level, 291 trainings at a regional level, 2,096 trainings at a company level and 41,707 trainings at a project level, with a total training time of approximately 827,812 hours and an annual average training hours per employee of approximately 38 hours. In addition, we have established targeted training plans for employees of different specialties at different levels. We have also built and uploaded various training courses, our standardized business operation procedures and other general skill courses to Fully Learn, an online platform, so that our employees can learn independently. As of December 31, 2020, we had 326 courses in ten major categories on Fully Learn. Online training has become a major component to our offline training. As of December 31, 2020, over 300 of our employees held national titles and various registered professional qualification certificates, and engaged in advanced technical management.

We have also established a competitive performance evaluation system and motivation mechanism. Under our employee evaluation system, we evaluate employees from multiple aspects such as work attitude, service quality and work performance. Based on the results of the evaluation, we give employees corresponding awards in recognition of their high performance. We offer a competitive base salary and various employee benefits, such as subsidies, medical examinations, discounts on home purchases and social security provident funds. At the same time, we focus on cultivating an innovative enterprise spirit and advocating a culture of “treating the Company as your family”, so that employees have a sense of mission and responsibility, and bring their best to work, which not only improves the quality of our services but also boost our corporate development. We believe that our comprehensive training system, performance evaluation system, motivation mechanism, generous employee benefits and positive corporate culture will help us cultivate, attract and retain a team of employees with excellent professional quality and align employees’ interests with ours.

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DEVELOPMENT STRATEGIES

We aim to becoming a pioneer in serving modern smart cities and enriching community life in China. We plan to increase our market share, brand influence and overall competency by implementing the following strategies:

Increase our presence in first-tier, new first-tier and second-tier cities, solidify our leading market position, and further expand the scale of our property management services, our brand influence and our overall competency through synergistic development with R&F Group, business outreach and strategic acquisitions

To solidify our leading position in the market, increase our market share and brand influence, and foster our market-oriented development, we plan to expand the scale of our property management services in terms of total contracted GFA, GFA under management, number of properties under management and types of properties under management through synergistic development with R&F Group, business outreach and strategic acquisitions.

Synergistic Development with R&F Group

We plan to achieve rapid growth in the scale of our business by actively undertaking projects developed by R&F Group and leveraging R&F Properties’ abundant land bank in first-tier, new first-tier and second-tier cities. First, based on our long-term and stable cooperation with R&F Group, we will take advantage of R&F Group’s urban renewal projects to further expand our service mix and geographical coverage. In addition, in line with R&F Group’s own growth in the hotel, industrial park, cultural and tourism, medical and health care business segments, we will further enrich the types of properties under our management in these segments. In particular, in view of the promising prospects of industrial parks, we plan to gain managerial experience by participating in R&F Group’s industrial park projects. After we have established an efficient and profitable management model for industrial parks, we will undertake more high-quality industrial park projects to enrich our portfolio of projects under management and export our industrial park management model to enhance our brand value. Besides industrial parks, we also plan to render property management services to other types of properties, including municipal projects and education parks.

Business Outreach

While we will continue to provide high-quality property management services to our existing customers, including R&F Group, we will also leverage the brand value and market appeal of “R&F” to develop new businesses and customers, fully taking advantages of each of Fuwu Shangqi (富物商企) and Fulin Meijia (富鄰美家) in providing services to commercial buildings and residential communities, respectively. By increasing our business outreach, we believe that we can further expand our business scale, enhance our comprehensive competency and consolidate our leading position in the property management industry.

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Strategic Merger and Acquisitions

With a goal to achieve sustainable, rapid growth and to increase market share, we plan to expand through strategic mergers and acquisitions of other property management companies with high asset quality, medium size and strong business development capabilities. Regarding selection criteria, in terms of region, we will focus on property management companies located in Greater Bay Area, the Yangtze River Delta, the Bohai Economic Rim, and other developed areas along the east coast of China, as well as well-known brands located in provincial capitals; in terms of property portfolio, we will focus on companies with services that are complementary to our own, such as property management companies with extensive experience and comparative advantages in managing commercial properties and public buildings; in terms of financial indicators, we will primarily consider property management companies with an average annual revenue growth rate of not less than 7.0%, a growth rate of GFA under management of not less than 6.0%, a gross profit margin of not less than 10.0%, a net profit margin of not less than 5.0% and positive cash flows from operating activities.

In addition to property management companies, we also plan to explore opportunities with other industry players, such as companies that provide maintenance and repair services for elevators and other facilities, advertising and media companies, real estate agency companies, education service providers, home decoration service providers and insurance brokers. We believe such exploration will further diversify our revenue sources, increase customer loyalty, generate new growth opportunities and help consolidate our leading position in the property management industry.

We plan to use approximately [REDACTED]% of the net proceeds from the [REDACTED] for business outreach, strategic mergers and acquisitions and investments. Please refer to “Future Plans and Use of Proceeds” for more details. We believe that acquiring and investing in other property management companies can further increase our market share, expand our business scale and solidify our industry position. Moreover, we believe that acquiring and investing in companies that provide property management related services will help us render more comprehensive and integrated services, control our service quality and related costs more efficiently, and enhance our brand image. As of the Latest Practicable Date, we had not identified or committed to any acquisition targets for our use of net proceeds from the [REDACTED].

Increase investments in technology to refine our services and increase our profitability

We plan to improve our management efficiency, reduce our operating costs and enhance customer experience by applying innovative information technology and using machinery instead of manual labor. The technologies we plan to invest in include Internet-of-Things, big data, artificial intelligence, smart energy consumption management, smart enterprise decision making, and upgrading of unattended parking spaces. We believe our investments will help optimize the allocation of our human resources.

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We will improve our collection and analysis of customer data, enhance the precision of our marketing strategies by analyzing customers’ behavioral data, provide management with more accurate business planning and positioning, and create better business strategies for our tenants to increase their operating performance.

In addition, we plan to strengthen our intelligent operation data center, regularly update and analyze the important data relating to regional economies, geographic information and operational data, remotely manage each commercial property across China in real time through our online platform, and develop a better understanding of customer flow, revenue, occupancy rate and sales in retail properties and make a flexible adjustment of operating strategies according to the specific situations. We believe such measures will help us achieve quality control, effectively reduce management costs and enhance operational efficiency.

We plan to cooperate with leading domestic technology companies in the areas mentioned above and leverage their experience and strengths in technology to accelerate smart facility and information technology upgrades. We plan to invest approximately [REDACTED]% of the net proceeds from the [REDACTED] in information technology upgrades to improve service quality and operational efficiency.

Integrate the entire value chain of asset services, cultivate community services with high added value, and enhance customer experience

We are committed to providing high-quality services to meet our customers’ needs. We plan to provide more and better value-added services to property owners and residents by further improving our professional capabilities in providing value-added services such as community operation services and community asset management services, and to expand our value-added services to adjacent communities. Based on our extensive experience and deep understanding of the industry, we intend to make strategic investments in companies in the upstream or downstream of the industry chain that provide value-added services, including:

• Investing in other property management companies to enrich our portfolio of properties under management, improve our profitability and optimize our blueprint of comprehensive property management. For example, we expect the acquisition of medical companionship services will enable us to provide elderly care services;

• Investing in national or regional service providers that can create synergy with our services, such as brokerage, insurance, asset management and new retail services, and build a comprehensive service ecosystem that enhances customer loyalty; and

• Investing in our upstream and downstream business partners, such as delivery service providers, smart home technology companies and service platforms, to increase our profitability and broader our customer base. We believe that strategic investments in our upstream and downstream companies will not only increase our productivity and efficiency, but also improve user experience and reduce costs.

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We plan to use approximately [REDACTED]% of the net proceeds from the [REDACTED] for strategic investments related to value-added services and upstream and downstream industry chains. Please refer to “Future Plans and Use of Proceeds” for further details. As at the Latest Practicable Date, we have not identified any potential acquisition target or entered into any finalized agreement for such investment or acquisition.

Further improve our human resource management, build a professional and pragmatic team, and refine talent motivation and development mechanism

We attach great importance to talent cultivation and development, insist on following a people-oriented philosophy, and establish a dual-track talent development mechanism which cultivates internal talent within our Company and introduces external talent from third-party companies. We also establish a sound governance system for human management to ensure that we can continue to operate and grow sustainably.

As we expand our business operations and diversify our services in the future, we will continue to improve the our human resource management system, motivation mechanism, and employee training system. First, we will upgrade our motivation mechanism by improving our equity incentives system on top of our performance-based compensation system and profit- based incentive system, and utilize share options to enhance our employees’ comprehensive income to attract and retain more talent. Second, we will continue to develop our training system by putting together a team of professional lecturers and enriching our existing curriculum to provide systematic training to employees at all level. We currently have four curriculums, namely the Pilot Program which is designed for general manager reserve, the Backbone Program which is designed for our management, the Frontrunner Program which is designed for project manager reserve, and the Leader Program which is designed for management trainees. Finally, we plan to optimize the performance appraisal system, and introduce external talent from third-party companies to further improve employees’ productivity.

OUR BUSINESS MODEL

We primarily generate revenue from two business segments:

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The following table sets forth a breakdown of our total revenue by business segments during the Track Record Period.

For the year ended December 31, 2018 2019 2020 RMB’000 % RMB’000 % RMB’000 %

Total...... 1,823,448 100.0 2,170,101 100.0 2,597,422 100.0

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RESIDENTIAL PROPERTY MANAGEMENT SERVICES

Overview

Our residential property management services segment includes three business lines: (i) basic property management services to residential properties; (ii) value-added services to non-property owners; and (iii) community value-added services.

• Basic property management services to residential properties. We offer a wide range of basic property management services to property owners, residents and property developers. Our services typically include security services, cleaning and greening services, and repair and maintenance services. During the Track Record Period, we charge property management fees on a lump sum basis.

• Value-added services to non-property owners. We offer property developers full-cycle value-added services covering various stages of the property development and delivery process. Our value-added services to non-property owners include (i) preliminary planning and design consultancy services and pre-delivery services in which we advise on various stages of property developers’ business operations from a property management perspective and inspect the properties to be delivered as well as assist in the delivery process; (ii) sales office management services in which we provide property management services to property developers’ sales offices and show flats; and (iii) other specially commissioned services, such as pre-delivery cleaning and greening services and installation of smart parking system as requested by the property developers.

• Community value-added services. We offer community value-added services primarily to property owners and residents, such as (i) home living services, in which we primarily help property owners and residents with daily house cleaning, decoration and furnishing services and repair and maintenance services; (ii) community operation services, in which we rent out leasable common area, advertising spaces and parking space and assist property owners in selling and renting out their properties; and (iii) community living services, in which we primarily provide recreation center operation services, group purchase facilitation services and ticketing agency services.

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The following table sets forth a breakdown of our total revenue under our residential property management services segment by business line during the Track Record Period.

For the year ended December 31, 2018 2019 2020 RMB’000 % RMB’000 % RMB’000 %

Basic property management services to residential properties ...... 772,193 70.7 938,783 67.6 1,123,903 64.0 Value-added services to non-property owners ...... 247,228 22.6 360,019 25.9 540,428 30.8 Community Value-added services ...... 72,256 6.7 89,969 6.5 92,795 5.2

Total...... 1,091,677 100.0 1,388,771 100.0 1,757,126 100.0

Our Geographic Presence

Since our establishment in 1997, we have expanded our presence nationwide, and have achieved 378 contracted residential property projects and an aggregate contracted GFA of 88.3 million sq.m. of residential properties, covering 98 cities across 26 provinces, autonomous regions and municipalities in the PRC as of December 31, 2020. We managed 295 residential properties with an aggregate GFA under management of 58.1 million sq.m. as of December 31, 2020. The following map illustrates the locations of residential properties under our management and were contracted to manage as of December 31, 2020.

Northeastern

Contracted GFA: 3.8 million sq.m. Northwestern GFA under management: 2.2 million sq.m. Contracted GFA: 3.5 million sq.m. Hulun Buir East Inner Mongolia Heilongjiang GFA under management: 1.9 million sq.m. (Hulun Buir,Hinggan League Hinggan League, Tongliao, Chifeng, Xilin Gol League) Xilin Gol League Tongliao Jilin

Chifeng Central Inner Xinjiang Liaoning Mongolia (Hohhot, Baotou, Ulanqab) West Inner Mongolia Beijing Northern Gansu (Alxa League, Bayannur, Tianjin Wuhai and Ordos) Contracted GFA: 29.7 million sq.m. Hebei GFA under management: 23.2 million sq.m. Shanxi Ningxia Shandong Eastern

Qinghai Contracted GFA: 17.4 million sq.m.

Shaanxi Henan Jiangsu GFA under management: 9.1 million sq.m.

Tibet Anhui Shanghai Sichuan Hubei Central Zhejiang Chongqing Contracted GFA: 3.6 million sq.m. Jiangxi Hunan GFA under management: 0.8 million sq.m. Guizhou Fujian

Yunnan Taiwan Guangxi Guangdong South China Sea

Southwestern Hainan Southern

Contracted GFA: 7.5 million sq.m. Contracted GFA: 22.8 million sq.m.

GFA under management: 5.4 million sq.m. GFA under management: 15.5 million sq.m.

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Total ...... 190 40,097 772,193 100.0 226 47,477 938,783 100.0 295 58,142 1,123,903 100.0

Notes:

(1) Includes Guangdong Province and Hainan Province.

(2) Includes Sichuan Province, Chongqing Municipality, Yunnan Province and Guizhou Province.

(3) Includes Beijing Municipality, Tianjin Municipality, Hebei Province, Shanxi Province and central Inner Mongolia Autonomous Region (Hohhot City, Baotou City and Ulanqab City).

(4) Includes Shaanxi Province and Xinjiang Uygur Autonomous Region.

(5) Includes Shanghai Municipality, Jiangsu Province, Zhejiang Province, Shandong Province, Anhui Province, Fujian Province and Jiangxi Province.

(6) Includes Henan Province, Hubei Province and Hunan Province.

(7) Includes Heilongjiang Province, Liaoning Province and east Inner Mongolia Autonomous Region (Hulun Buir City, Hinggan League, Tongliao City, Chifeng City and Xilin Gol League).

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The table below sets forth a breakdown by city tiers of our total number of residential property projects and GFA under management for residential properties as of the dates indicated, and revenue generated from basic property management services to residential properties for the years indicated.

First-tier cities(1) ..... 62 13,637 300,234 38.9 62 13,657 343,586 36.5 62 13,494 339,030 30.2 New first-tier cities(2) . . . 52 12,060 233,423 30.2 57 14,019 278,558 29.7 67 15,448 320,655 28.5 Second-tier cities(3) .... 54 8,480 138,002 17.9 68 11,223 173,357 18.5 83 14,457 244,041 21.7 Others(4) ...... 22 5,921 100,534 13.0 39 8,577 143,282 15.3 83 14,743 220,177 19.6

Total ...... 190 40,097 772,193 100.0 226 47,477 938,783 100.0 295 58,142 1,123,903 100.0

Notes:

(1) First-tier city in which we provide basic property management services to residential projects includes Beijing, Shanghai and Guangzhou.

(2) New first-tier city in which we provide basic property management services to residential projects includes Chengdu, Foshan, Hangzhou, Nanjing, Shenyang, Tianjin, Xi’an, Zhengzhou and Chongqing.

(3) Second-tier city in which we provide basic property management services to residential projects includes Guiyang, Harbin, Huizhou, Kunming, Langfang, Nanchang, Nantong, Ningbo, Shijiazhuang, Taiyuan, Wenzhou, Wuxi and Yantai.

(4) We also provide basic property management services to residential projects in 48 cities which are not first-tier, new first-tier or second-tier cities.

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We primarily offer property management services to residential properties developed by R&F Group or joint ventures and associates of R&F Group. The following table sets forth a breakdown of our total number of contracted projects, total contracted GFA, total number of projects under management and total GFA under management for residential properties by developer type as of the dates indicated, as well as revenue from basic property management services to residential properties by developer type for the years indicated.

R&F Group BUSINESS

5 – 159 – (1) ...... 261 61,906 182 38,397 742,494 96.2 320 74,955 215 45,108 900,599 95.9 351 82,831 281 55,084 1,072,191 95.4 Joint ventures and associates of R&F Group (2) ..... 17 4,056 8 1,700 29,699 3.8 21 4,927 11 2,368 38,184 4.1 23 5,109 13 3,038 51,606 4.6 Independent third-party property developers (3) . . . – – – – – – 1 223 – – – – 4 372 1 20 106 0.0

Total ...... 278 65,962 190 40,097 772,193 100.0 342 80,105 226 47,477 938,783 100.0 378 88,312 295 58,142 1,123,903 100.0

Notes:

(1) Refers to properties solely developed by R&F Group or jointly developed by R&F Group and independent third-party property developers in which R&F Group held a controlling interest.

(2) Refer to properties jointly developed by R&F Group and independent third-party property developers in which R&F Group did not hold a controlling interest.

Basic Property Management Services to Residential Properties

We have been providing property management services since our establishment in 1997. As of December 31, 2020, we were contracted to manage 378 residential property projects and our aggregate contracted GFA for residential properties reached approximately 88.3 million sq.m., covering 98 cities across 26 provinces, autonomous regions and municipalities in the PRC. As of the same date, we managed 295 residential properties with an aggregate GFA under management of 58.1 million sq.m. Our revenue from basic property management services to residential properties reached RMB772.2 million, RMB938.8 million and RMB1,123.9 million in 2018, 2019 and 2020, respectively, accounting for 70.7%, 67.6% and 64.0% of our total revenue under our residential property management services segment for the same years, respectively.

The following table sets forth the number of residential properties and corresponding GFA under our management, as well as the number of residential properties we were contracted to manage, corresponding contracted GFA and undelivered GFA as of the dates indicated.

As of December 31, 2018 2019 2020

Notes:

(1) Refers to residential properties that have been delivered to us for property management purposes.

(3) Calculated as the difference between contracted GFA and GFA under management for residential properties as of the dates indicated.

Scope of Services

We provide quality property management services to enhance the living experience of property owners and residents in the residential properties under our management. The routine customer services we provide generally include day-to-day service response, regular customer visits and inquiry handling. In addition, we provide the following major types of basic property management services to residential properties.

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• Security services. We provide quality security services, as a part of which we manage the overall security, fire safety, and parking in residential properties under our management. We check the identities of visitors and visiting vehicles, and handle emergencies on demand. We provide security services generally through our own employees.

• Cleaning and greening services. To create a clean and tidy living environment, we provide general cleaning, garbage collection and pest control services for common areas of buildings and public facilities in residential properties under our management. We also provide greening and gardening services to common areas of the residential properties we manage. We provide cleaning and greening services through our own employees and third-party subcontractors.

• Repair and maintenance services. We are generally responsible for the maintenance of (i) common area facilities and construction structures such as lifts, escalators; (ii) fire and safety facilities such as fire extinguishers and fire alarm systems; (iii) security facilities such as fences and surveillance cameras; and (iv) utility facilities such as water pump rooms, water supply and drainage systems. We provide repair and maintenance services through our own employees and third-party subcontractors.

Property Management Service Agreements

During the Track Record Period, all of our property management service agreements for residential properties were obtained by participating in tenders, a process where property developers or property owners’ associations evaluate and select from multiple property management companies. With respect to residential property management, tender processes are required unless a property is considered by the relevant local real estate administration authorities as insignificant and does not warrant a tendering process, or there are fewer than three bidders and the relevant local real estate administration authorities allow the engagement of a property management company directly through negotiations without going through the tender process.

The tender process is well-established, competitive and fairly structured. We do not enjoy any preferential treatments in the selection process for properties developed by R&F Group and are not given extra weight in the selection processes due to our relationship with R&F Group.

The tender process requires a minimum of three bidders. Generally, approximately five to seven bidders participate in a tender process. For higher quality projects, the number of bidders could be even higher. The bidders other than ourselves are generally independent regional or national property management companies that possess the necessary qualifications to submit a bid for the tendering process. The tender process will be evaluated by a tender evaluation committee organized under the Interim Measures for Tender and Bidding Management for Preliminary Property Management (《前期物業管理招標投標管理暫行辦法》) where neither

– 161 – 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. BUSINESS the property developer nor we would be able to exert influence on the selection process. The tender evaluation committee shall consist of an odd number of at least five members, including: (i) at least a two-thirds majority of property management experts who are independent of the relevant developer and our Group and are selected on a random basis from a list of experts compiled by the local real estate administrative department; and (ii) the representative members from the property developer. In evaluating the bids, the tender evaluation committee would consider a number of factors, including reputation, quality of service, management system, human resources management and the proposed management plan.

Tender invitations are usually issued by property developers for properties under development, or from property owners’ associations for properties that wish to replace their existing property management service provider. After receiving the tender invitations, we submit tender documents to the property developer or property owners’ associations which generally include proposed pricing, proposal and plan for property management and other information as specified by the tender invitation. We may be required to provide pre- qualification documents for vetting before submitting the formal tender documents. The property developers and property owners’ associations will then evaluate the tenders received, and select the winner based on factors such as reputation, quality of service, management system, human resources management and the proposed management plan. After winning the tenders, we enter into property management service agreements with the relevant property developers and property owners’ associations, and then file the agreements with the relevant authorities. The following flow chart illustrates each stage of a typical tender process.

Filing of Invitation Tender Issue of Open Agreement Tender to Tender with Pre- Preparation Tender Success and Restricted Signing Invitation the Relevant Qualification and Evaluation in Tender Tenders and Filing Local Authority Submission

We provide property management services to substantially all residential properties developed by R&F Group or joint ventures and associates of R&F Group. Our bidding success rates were 100.0% during the Track Record Period.

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The following diagram illustrates our relationships with various parties under our property management agreements.

Preliminary property management service agreements(2)

Our Group Pay property management fees Property developers

Provide property management service before property delivery

Provide property management service after property delivery Enter into property Pay property management management Sell property service fees agreements(3)

Property owners’ Property owners associations(1) Establish property owners’ associations

Notes:

(1) A property owners’ association is authorized under PRC laws to act on behalf of the property owners.

(2) A preliminary property management service agreement entered into between a property developer and us before the property is delivered to property owners is legally binding on all future property owners in accordance with the relevant PRC laws and regulations.

(3) A property management service agreement entered into between a property owners’ association and us is legally binding on all property owners in accordance with the relevant PRC laws and regulations.

The table below sets forth a breakdown of our total number of residential property projects and GFA under management for residential properties as of the dates indicated, and revenue generated from basic property management services to residential properties at different stages for the years indicated.

Preliminary stages(1).... 164 33,460 712,808 92.3 200 40,741 875,956 93.3 270 51,692 1,041,534 92.7 Property owners’ associations stage(2) .... 26 6,637 59,385 7.7 26 6,736 62,827 6.7 25 6,450 82,369 7.3

Total ...... 190 40,097 772,193 100.0 226 47,477 938,783 100.0 295 58,142 1,123,903 100.0

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Notes:

(1) Include stages at which a project has been delivered, but the property owners’ association has not been established.

(2) Include property management projects where we rendered services after property owners’ associations were established.

Key Terms of Property Management Service Agreements with Property Developers

Our preliminary property management service agreements with property developers for residential properties typically include the following key terms.

• Scope of services. A typical agreement with a property developer sets out the scope of services, which typically includes the formulation of property management policies and protocols, facility management, security, cleaning, greening and gardening and maintaining common area traffic order and road conditions.

• Performance standards. The agreement sets forth specific standards and frequency for our main services, as well as the number of staff for each service.

• Property management fees. The agreement sets forth the amount of property management fees and the GFA covered, as well as whether the fee is payable on a lump sum. The property developer is responsible for paying the property management fees for unsold property units, which typically begin to accrue upon the execution of the property management service agreement and delivery of the relevant unit to a property purchaser. We also charge a late fee for overdue property management fees, which is typically a percentage of the overdue amount. For properties with carparks, we also set out our fee rate for each carpark space per month.

• Property developer’s rights and obligations. The property developer is entitled to (i) supervise our services according to the standards included in the agreement; and (ii) review and approve property management service plans and management policies. The property developer is typically responsible for (i) offering us the necessary office space to carry out our services; (ii) cooperating with our work; (iii) informing property owners and residents of their obligations to pay property management fees and follow property management policies; (iv) handling certain repair and maintenance obligations; and (v) offering records, blueprints and other documents and materials as necessary.

• Our rights and obligations. We are entitled to receive property management fees according to the relevant provisions in the agreement. We are responsible for (i) providing the services included in the agreement; (ii) cooperating with the supervision by property developers; (iii) monitoring property use; (iv) publicly disclosing collection and spending of public maintenance funds; and (v) managing relevant records and materials.

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• Term of service. The agreement typically expires after the property owners’ association is established.

• Dispute resolution. Parties are typically required to resolve any contractual dispute through negotiations first, failing which the dispute is to be resolved through arbitration or court proceedings.

After delivery of the properties by property developers, property owners may form and operate property owners’ associations. According to the Civil Code, property owners have the right to establish property owners’ associations at property owners’ meeting, and a preliminary property management service agreement entered into between a property developer and a property management service company in accordance with the PRC laws and regulations is legally binding on the relevant property owners. In addition, according to the Regulations on Property Management (《物業管理條例》), where there is only one owner, or where there are a few owners and they all agree not to form the property owners’ general meeting, the owner(s) shall (jointly) perform the duties of the property owners’ general meeting and the property owners’ association.

Once our preliminary property management service agreements have expired, we may negotiate with the newly-formed property owners’ associations for the terms of new property management service agreements. The property owners’ associations are independent from us. In order to secure and continue to secure property management service agreements, we must consistently provide quality services at competitive prices. According to the Civil Code, a quorum for the general meeting of the property owners to engage or dismiss a property management enterprise shall consist of the property owners holding more than two-thirds of exclusive areas and representing more than two-thirds of the total number of property owners and shall have affirmative votes of property owners who participate in the voting and hold more than half of the exclusive area owned by the voting owners and who represent more than half of the total number of property owners participating in voting. The property owners’ meeting may either hire a new property management service provider through the tender process or select one based on specific standards to do with terms and conditions of service, quality and price. See “Regulatory Overview – Legal Supervision of Property Management Services and other Related Services – Appointment of Property Management Companies.”

As of December 31, 2020, 19 residential properties under our management established property owners’ associations, which accounted for approximately 6.4% of the total number of residential properties under our management. The property owners’ associations are independent from us. Such property owners’ associations had not requested to replace us with other property management companies as of the Latest Practicable Date. Among the 19 property projects that had established property owners’ associations, we successfully entered into new property management service agreements with the property owners’ associations for two of these property projects and continued to manage the remaining 17 property projects under the original preliminary property management service agreements.

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Key Terms of Property Management Service Agreements with Property Owners

Our property management service agreements with property owners’ associations and property owners for residential properties typically include the following key terms.

• Scope of services. The agreement sets forth our scope of services, which typically includes property management services to common areas and facilities, such as security, cleaning, greening and gardening, managing common area traffic and parking, repairing and maintaining public facilities, managing the carparks, setting up community activities, and recordkeeping. We may outsource certain services to qualified subcontractors.

• Performance standards. The agreement sets forth specific standards, staffing requirements and frequency for our main services.

• Property management fees. The agreement sets forth the amount, the lump sum basis and calculation method of property management fees. The amount of property management fees for each period is dependent on the GFA occupied by property owners and residents, as well as property types. The agreement also includes a fee schedule for additional services beyond the scope of services mentioned above, such as parking space management services, which property owners may select based on their needs. We may impose surcharges on property owners or residents who fail to pay property management fees on time.

• Rights and obligations of property owners’ associations. The property owners’ association has the right to (i) renew agreements with us or terminate us for cause; (ii) supervise the use of public funds and the management of common areas and public facilities; and (iii) review our annual budget and property management plans. Under the supervision of property owners, property owners’ associations are responsible for (i) ensuring timely payment of property management fees and contributions to specialized repair funds; (ii) cooperating with our property management services; (iii) keeping necessary records; and (iv) offering us office space to carry out our work.

• Our rights and obligations. We are entitled to timely collection of property management fees as provided in the agreement. We are in turn responsible for offering services provided in the agreement pursuant to the relevant service standards. We are also responsible for recordkeeping, managing use of properties by occupants, and announcing major information regarding the property management services.

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• Terms and termination. The agreement term is typically three to four years from the date of signing.

• Dispute resolution. Parties are required to resolve any contractual dispute through negotiations first, failing which the dispute is to be resolved through arbitration or court proceedings.

According to relevant PRC laws and regulations, the property owners’ association is elected by property owners, and represents their interests in matters concerning property management. The property owners’ association’s decisions are binding on all property owners. As advised by our PRC Legal Advisors, the agreements between property owners’ associations and property management companies are valid and legally binding on property owners represented by property owners’ association, even if the property owners are not themselves parties to such agreement. As a result, we have legal claims against property owners for accrued and outstanding property management fees.

Property Management Fees

During the Track Record Period, we charge property management fees on a lump sum basis for residential properties under our management where we act as the principal provider of property management services, and recognize the entire amount received or receivable from property developers, property owners and residents as our revenue, and all related costs as cost of sales, over the service period.

Under the lump sum basis, we charge a predetermined property management fee per sq.m. of GFA under management on a regular basis which represents an all-inclusive fee for all property management services provided by us and our subcontractors. We are entitled to retain the full amount of property management fees received from property developers, property owners and residents. We also bear property management service costs, which we recognize as our cost of sales. If the property management fees we charge during the term of a property management service agreements are not sufficient to cover all the costs incurred, we bear the loss and may not request property developers, property owners or residents to pay us the shortfall.

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In 2018, 2019 and 2020, we incurred losses of RMB59.7 million, RMB37.9 million and RMB40.3 million, respectively, with respect to 56, 53 and 59 residential property projects under our management, respectively. Such losses were primarily due to the relatively low property management fees and the relatively high labor cost and maintenance costs of these properties. We plan to turn around our operations in relation to these properties by (i) actively communicating with the relevant property developers or property owners’ associations to renegotiate our fee rates upon renewal of the relevant property management service agreements; (ii) further streamlining our business operations and improve the efficiency of our employees leveraging economies of scale as well as our various information systems; and (iii) promoting community value-added services in those properties, which typically generates higher profit margins than property management services. Our revenue from property management services from such loss-making properties was approximately RMB270.3 million, RMB303.5 million and RMB222.7 million in 2018, 2019 and 2020, respectively, representing 35.0%, 32.4% and 19.9% of our total revenue from basic property management services to residential properties for the same years, respectively. As of the Latest Practicable Date, 34 of the loss-making residential property projects under our management as of December 31, 2020 had turned profitable. See “Risk Factors – Risks Relating to Our Business and Industry – We may be subject to losses and our profit margins may decrease if we fail to control our costs in rendering our property management services on a lump sum basis.”

Our Pricing Policy

We generally price our residential property management services based on a number of factors, including (i) the types, sizes and locations of the properties; (ii) the scope and quality of our services; (iii) our estimated costs and expenses; (iv) our target profit margins; (v) the profiles of property owners and residents; (vi) the local government’s guidance price on property management fees (where applicable); and (vii) the maximum pricing of comparable properties. Under the property management service agreements, we may raise property management fees upon renewal of the agreements after negotiations with property owners and residents.

The relevant price administration department and construction administration department of the State Council are jointly responsible for supervising property management fees and issuing relevant guidance. See “Regulatory Overview – Legal Supervision of Property Management Services and other Related Services – Charges for property management enterprises – Property management fees.” For the relevant risks, see “Risk Factors – Risks Relating to Doing Business in the PRC – We are subject to the regulatory environment and measures affecting the PRC property management and real estate industries.”

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The following table sets forth the average property management fee per sq.m. of the residential properties under our management by developer type for the years indicated.

Property projects under management For the year ended December 31, 2018 2019 2020 RMB per sq.m. per month

Notes:

(1) Refers to properties solely developed by R&F Group or jointly developed by R&F Group and independent third-party property developers in which R&F Group held a controlling interest.

(2) Refer to properties jointly developed by R&F Group and independent third-party property developers in which R&F Group did not hold a controlling interest.

(3) Refer to properties developed solely by independent third-party property developers.

Payment and Credit Terms

Property management fees for residential properties under our management are generally due in advance on a quarterly basis in accordance with the agreement provisions. Property owners and residents pay us a fixed amount, and we retain the surplus and bear the losses after paying necessary operating costs and expenses.

We issue demand notes to property owners and/or property developers prior to payment due dates, and typically receive payments of our property management service fees after the issuance of the demand note, which, according to CIA, is consistent with the property management industry norm in the PRC.

We primarily accept payments for property management fees through bank transfers, online payment platforms and cash. We adopt different collection approaches, such as making phone calls, sending text messages, paying in-person visits, issuing legal collection letters and filing lawsuits.

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If the property management fees become past due, we may call, text or send written notice to such customers to follow up, and may have our attorneys send demand letters to such customers. If the outstanding fees remain unpaid for more than certain period, generally three months, we may file a lawsuit against such customer to claim the outstanding amounts.

Expiration Schedule of Property Management Service Agreements

The following table sets forth the expiration schedule of our property management service agreements for residential properties as of December 31, 2020.

Number of GFA under agreements Contracted GFA management Undelivered GFA % sq.m.’000 % sq.m.’000 % sq.m.’000 %

Property management service agreements without fixed term(1) . . . 276 73.0 65,173 73.8 44,163 76.0 21,010 69.6 Property management service agreements with expiring in Year ending December 31, 2021 ...... 20 5.3 4,179 4.7 3,627 6.2 552 1.8 Year ending December 31, 2022 ...... 35 9.3 6,935 7.9 5,238 9.0 1,698 5.6 Year ending December 31, 2023 and beyond...... 47 12.4 12,025 13.6 5,115 8.8 6,910 22.9 Subtotal ...... 102 27.0 23,140 26.2 13,980 24.0 9,160 30.4

Total ...... 378 100.0 88,312 100.0 58,142 100.0 30,170 100.0

Note:

(1) Includes preliminary property management service agreements we entered into with property developers. Such agreements can be terminated when the property owners’ associations are formed and decide to select other property management companies.

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The following table sets forth movements of our contracted GFA and GFA under management for residential properties during the years indicated.

For the year ended December 31, 2018 2019 2020 Contracted GFA under Contracted GFA under Contracted GFA under GFA management GFA management GFA management sq.m.’000

As of the beginning of the year .... 49,556 34,682 65,962 40,097 80,105 47,477 New engagements(1) . . 16,406 5,415 14,143 7,380 8,499 10,957 Terminations(2) . . . – – – – (292) (292)

As of the end of the year ...... 65,962 40,097 80,105 47,477 88,312 58,142

Notes:

(1) Primarily includes (i) preliminary property management service agreements entered into with property developers for new residential properties; and (ii) property management service agreements for residential properties that replaced their previous property management companies. The renewed agreements are not regarded as new engagements entered into during such year. The newly engaged GFA under management includes the newly delivered GFA we contracted in prior years.

(2) Primarily arose out of non-renewal of certain property management service agreements, reflecting our reallocation of resources to more profitable engagements in an effort to optimize our property management portfolio.

During the Track Record Period, our agreement renewal rates and retention rates remained relatively favorable, which we believe reflects on our capabilities in offering quality property management services. During the Track Record Period, we voluntarily chose not to renew one property management service agreements due to its low profit margin, and none of our property management service agreements was terminated or not renewed upon expiration by property owners’ associations or property owners. In 2018, 2019 and 2020, our property management service agreement renewal rates were 100%, 100% and 97.1%, respectively. In 2018, 2019 and 2020, our property management service agreement retention rates were 100%, 100% and 99.8%, respectively. Our renewal rate and retention rate for 2020 were below 100% because we voluntarily chose not to renew the property management service agreement for one project after it expired in 2020 due to its low profit margin.

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Value-Added Services to Non-Property Owners

Our value-added services to non-property owners include (i) preliminary planning and design consultancy services and pre-delivery services, (ii) sales office management services, and (iii) other specially commissioned services. The following table sets forth a breakdown of our revenue from value-added services to non-property owners for the years indicated.

For the year ended December 31, 2018 2019 2020 RMB‘000 % RMB‘000 % RMB‘000 %

Preliminary planning and design consultancy services and pre-delivery ...... 50,925 20.6 71,549 19.9 114,825 21.2 Sales office management services ...... 189,147 76.5 275,073 76.4 409,001 75.7 Other specially commissioned services ...... 7,156 2.9 13,397 3.7 16,602 3.1

Total...... 247,228 100.0 360,019 100.0 540,428 100.0

Preliminary Planning and Design Consultancy Services and Pre-delivery Services

We offer various preliminary planning and design consultancy services which address property developers’ needs at different stages of their business operations. At the construction planning stage, we review developers’ construction blueprints and offer recommendations from a property management perspective, such as advice on energy conservation, fire safety and general security. We also inspect key milestones of construction processes to ensure compliance with original design and relevant construction regulations. Before they deliver completed properties to property owners, we also offer pre-delivery property inspection services to property developers. After our initial round of inspections, we provide feedback to property developers in relation to properties that need further work, and conduct follow-up inspections until such properties meet the delivery standards. On the date of property delivery to property owners, we accompany property owners and record their feedback and complaints on the property. We provide preliminary planning and design consultancy services and pre-delivery services through our own employees. We typically charge fixed service fees on a per sq.m. basis.

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Sales Office Management Services

We offer property management services to sales offices and show flats of property developers, such as security services, cleaning services and visitor reception. We do not participate in the sales transactions of our customers. We provide sales office management services through our own employees and third-party subcontractors. We typically charge property developers a fixed service fee on a cost-plus basis.

Other Specially Commissioned Services

We offer other services to property developers as requested by them, which may include, among others, special cleaning and greening services to the completed properties before the delivery to property owners and installation of smart parking system. We charge service fees based on the amount and complexity of the services provided and according to specific contractual terms for provision of such services. We provide such services through our own employees and third-party subcontractors.

Community Value-Added Services

We believe our quality community value-added services help improve the living experience and environment of property owners and residents of properties under our management, leading to higher overall customer satisfactions. Our community value-added services include (i) home living services, (ii) community operation services and (iii) community living services. The following table sets forth a breakdown of our revenue from community value-added services during the years indicated.

For the year ended December 31, 2018 2019 2020 RMB’000 % RMB’000 % RMB’000 %

Home living services ...... 39,200 54.2 47,790 53.2 48,243 52.0 Community operation services . . 31,406 43.5 39,347 43.7 41,203 44.4 Community living services..... 1,650 2.3 2,832 3.1 3,349 3.6

Total...... 72,256 100.0 89,969 100.0 92,795 100.0

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Home Living Services

Housekeeping Services

We offer daily house cleaning if requested by property owners or residents. We provide these services mainly through our own employees and third-party subcontractors, and we charge the service fees based on the period and complexity of services rendered.

Decoration and Furnishing Services

We aim to create one-stop service platform with respect to the property owners’ needs for decoration and furnishing. We offer basic home decoration services which typically include construction, purchases of furniture, home appliances and decoration, and also offer turnkey furnishing services to property owners and residents, which help them furnish and decorate the entire property unit to create a move-in ready residence. We enter into collaboration agreements with third-party merchants and make their products and services, primarily including furniture, home appliances, construction materials, accessories and decoration services, available to property owners and residents. Based on the orders received from property owners and residents, the third-party merchants will make deliveries to them. We collect a fixed percentage of the sales amount from the third-party merchants as our service fees. We provide these services mainly through our own employees and third-party subcontractors.

Repair and Maintenance Services

We assist property owners and residents in repairing household appliance and furniture. We collect fees based on the amount and type of services provided according to a fee schedule. We provide these services through our own employees and third-party subcontractors.

Community Operation Services

Community Space Management Services

We assist property owners in renting out lift, outer wall and other advertising spaces to third-party vendors. We also leasable facilities in the common areas of properties under our management to third-party vendors seeking a place to operate or promote their businesses. In addition, we help parking space owners lease parking spaces to individual users for long-term or temporary parking and collect parking fees. We provide our community space management services mainly through our employees and charge a percentage of the rental or parking proceeds as our service fees.

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Community Asset Management Services

We assist property owners in selling and renting out their properties, which involve assisting in searches for tenants or buyers, marketing efforts and coordination of visitor management. We reach out to potential tenants and property buyers through our network of property management offices located at the properties we manage across China. We offer community asset management services primarily through our own employees who hold relevant qualifications for real estate agency services and in cooperation with third-party real estate agencies charging a pre-determined percentage of the sales proceeds or rental income.

Community Living Services

Recreation Center Operation Services

We operate recreation centers mainly located in properties under our management by ourselves or through cooperation with third-party business partners. These centers are primarily open to property owners and residents to satisfy their sports and recreational needs, and typically include facilities such as restaurants, education institutes, swimming pools, gyms, children’s activity centers, beauty salons, among others. We provide recreation center operation services mainly through our own employees. We typically charge the service fees on a per sq.m. basis or a flat fee plus a pre-determined percentage of the sales amount as our service fees.

Group Purchase Facilitation Services

We coordinate group purchases of products such as groceries, daily household supplies and other popular merchandise among, and in accordance with the requirements of, property owners or residents. The property owners and residents may participate in the group purchase on Zizai Community mobile application. We provide group purchase facilitation services mainly through our own employees. We charge the third-party vendors a pre-determined percentage of the sales amount as our service fees.

Ticketing Agency Services

We also assist property owners and residents in booking short trips, cruise tours and outbound tours upon their requests on Zizai Community mobile application. We provide ticketing agency services mainly through our own employees. We typically charge the vendor a pre-determined percentage of the sales amount for our services.

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COMMERCIAL PROPERTY MANAGEMENT SERVICES

Overview

During the Track Record Period, we were contracted to provide commercial property management services to property owners and tenants in commercial properties, including retail properties, office buildings and serviced apartments. Other commercial properties that we were contracted to manage include education institutes and industrial parks. We began to provide commercial property management services to commercial properties in 1997. We have a long-term and stable cooperation with R&F Group, and have provided commercial property management services to substantially all commercial properties developed by R&F Group. In 2018, 2019 and 2020, revenue generated from commercial property management services amounted to RMB731.8 million, RMB781.3 million, and RMB840.3 million, respectively, representing approximately 40.1%, 36.0%, and 32.4%, respectively, of our total revenue for the same years.

The table below sets forth a breakdown of our total revenue from commercial property management service segment by service category for the years indicated.

For the year ended December 31, 2018 2019 2020 RMB’000 % RMB’000 % RMB’000 %

Basic property management services to commercial properties ...... 588,386 80.4 620,904 79.5 658,504 78.4 Commercial operational and value-added services ...... 143,385 19.6 160,426 20.5 181,792 21.6

Total...... 731,771 100.0 781,330 100.0 840,296 100.0

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Our Geographic Presence

Since we began to provide commercial property management services to commercial properties in 1997, we have expanded our presence nationwide, and have achieved 282 contracted projects and an aggregate contracted GFA of 16.3 million sq.m. of commercial properties, covering 60 cities across 26 provinces, autonomous regions and municipalities in the PRC as of December 31, 2020. We managed 257 commercial properties with an aggregate GFA under management of 11.2 million sq.m. as of December 31, 2020. The following map illustrates the location of the commercial properties under our management and commercial properties we contracted to manage as of December 31, 2020:

Northeastern

Contracted GFA: 0.5 million sq.m. Northwestern GFA under management: 0.3 million sq.m. Contracted GFA: 0.3 million sq.m. East Inner Mongolia (Hulun Buir, Heilongjiang GFA under management: 0.2 million sq.m. Hinggan League, Tongliao, Chifeng, Xilin Gol League)

Jilin

Central Inner Xinjiang Mongolia (Hohhot, Liaoning Baotou, Ulanqab) West Inner Mongolia (Alxa League, Bayannur, Beijing Northern Gansu Wuhai and Ordos) Tianjin Contracted GFA: 2.6 million sq.m. Hebei GFA under management: 2.3 million sq.m. Shanxi Ningxia Shandong Eastern

Qinghai Contracted GFA: 2.9 million sq.m.

Shaanxi Henan Jiangsu GFA under management: 1.5 million sq.m.

Tibet Anhui Shanghai Hubei Sichuan Central Zhejiang Chongqing Contracted GFA: 0.5 million sq.m. Jiangxi Hunan GFA under management: 0.04 million sq.m. Guizhou Fujian

Yunnan Taiwan Guangxi Guangdong South China Sea

Southwestern Hainan Southern

Contracted GFA: 2.1 million sq.m. Contracted GFA: 7.3 million sq.m.

GFA under management: 1.6 million sq.m. GFA under management: 5.2 million sq.m.

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As of/for the year ended December 31, 2018 2019 2020 Number of Number of Number of projects projects projects under GFA under under GFA under under GFA under management management Revenue management management Revenue management management Revenue sq.m’000. RMB’000 % sq.m’000. RMB’000 % sq.m’000. RMB’000 %

Total ..... 203 8,871 588,386 100.0 224 10,172 620,904 100.0 257 11,218 658,504 100.0

Notes:

(1) Includes Guangdong Province and Hainan Province.

(2) Includes Sichuan Province, Chongqing Municipality and Guizhou Province.

(3) Includes Beijing Municipality, Tianjin Municipality, Hebei Province, Shanxi Province, central Inner Mongolia Autonomous Region (Hohhot City, Baotou City).

(4) Includes Shaanxi Province and Xinjiang Uygur Autonomous Region.

(5) Includes Shanghai Municipality, Jiangsu Province, Zhejiang Province, Shandong Province, Anhui Province and Fujian Province.

(6) Includes Henan Province, Hubei Province and Hunan Province.

(7) Includes Heilongjiang Province, Liaoning Province and east Inner Mongolia Autonomous Region (Tongliao City).

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Total ...... 203 8,871 588,386 100.0 224 10,172 620,904 100.0 257 11,218 658,504 100.0

Notes:

(1) First-tier city in which we provide basic property management services to commercial properties includes Beijing, Shanghai and Guangzhou.

(3) Second-tier city in which we provide basic property management services to commercial properties includes Dalian, Fuzhou, Guiyang, Harbin, Huizhou, Langfang, Nantong, Taiyuan, Wuxi and Zhuhai.

(4) We also provide basic property management services to commercial properties in 30 cities which are not first-tier, new first-tier or second-tier cities.

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The following table sets forth the number of commercial properties and corresponding GFA under our management, as well as the number of commercial properties we were contracted to manage, corresponding contracted GFA and undelivered GFA as of the dates indicated.

As of December 31, 2018 2019 2020

Number of properties under management(1) . 203 224 257 Number of properties we were contracted to manage(2) ...... 232 265 282 GFA under management (sq.m. in thousands)...... 8,871 10,172 11,218 Contracted GFA (sq.m. in thousands)...... 11,664 14,639 16,275 Undelivered GFA (sq.m. in thousands)..... 2,793 4,467 5,056

Notes:

(1) Refers to commercial properties that have been delivered to us for property management purposes.

(3) Calculated as the difference between contracted GFA and GFA under management for commercial properties as of the dates indicated.

The following table sets forth the expiration schedule of our property management service agreements and their corresponding contracted GFA, GFA under management and undelivered GFA for commercial properties as of December 31, 2020.

Number of GFA under agreements Contracted GFA management Undelivered GFA % sq.m.’000 % sq.m.’000 % sq.m.’000 %

Property management service agreements without fixed term(1) . . . 187 66.3 9,247 56.8 6,205 55.3 3,041 60.2 Property management service agreements with expiring in Year ending December 31, 2021 ...... 22 7.8 1,180 7.3 1,180 10.5 1 0.0 Year ending December 31, 2022 ...... 31 11.0 3,031 18.6 1,965 17.5 1,065 21.0 Year ending December 31, 2023 and beyond...... 42 14.9 2,817 17.3 1,868 16.7 949 18.8 Subtotal ...... 95 33.7 7,028 43.2 5,013 44.7 2,015 39.8

Total ...... 282 100.0 16,275 100.0 11,218 100.0 5,056 100.0

Notes:

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The following table sets forth movements of our contracted GFA and GFA under management for commercial properties during the years indicated.

For the year ended December 31, 2018 2019 2020 Contracted GFA under Contracted GFA under Contracted GFA under GFA management GFA management GFA management sq.m.’000

As of the beginning of the year .... 10,843 7,625 11,664 8,871 14,639 10,172 New engagements(1) 821 1,246 2,975 1,300 1,636 1,047 Terminations(2) ...––––––

As of the end of the year ...... 11,664 8,871 14,639 10,172 16,275 11,218

Notes:

(1) Primarily includes property management service agreements with property owners for commercial properties. The renewed agreements are not regarded as new engagements entered into during such year. The newly engaged GFA under management includes the newly delivered GFA we contracted in prior years.

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We primarily offer commercial property management services to commercial properties developed by R&F Group or joint ventures and associates of R&F Group. The following table sets forth a breakdown of our total number of contracted projects, total contracted GFA, total number of projects under management and total GFA under management for commercial properties by developer type as of the dates indicated, as well as revenue from basic property management services to commercial properties by developer type for the years indicated.

R&F Group BUSINESS

8 – 182 – (1) ...... 219 10,675 195 8,357 581,131 98.8 252 13,650 213 9,571 608,679 98.0 266 15,254 245 10,578 642,821 97.6 Joint ventures and associates of R&F Group (2) ..... 12 874 8 514 7,255 1.2 12 874 11 601 12,225 2.0 12 874 11 601 15,646 2.4 Independent third-party property developers (3) . . . 1 115 – – – – 1 115 – – – – 4 147 1 39 37 0.0

Total ...... 232 11,664 203 8,871 588,386 100.0 265 14,639 224 10,172 620,904 100.0 282 16,275 257 11,218 658,504 100.0

Notes:

(1) Refers to properties solely developed by R&F Group or jointly developed by R&F Group and independent third-party property developers in which R&F Group held a controlling interest.

(2) Refer to properties jointly developed by R&F Group and independent third-party property developers in which R&F Group did not hold a controlling interest.

Total ...... 232 11,664 203 8,871 588,386 100.0 265 14,639 224 10,172 620,904 100.0 282 16,275 257 11,218 658,504 100.0 BUSINESS 8 – 183 – 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. BUSINESS

Scope of Services

Our commercial property management services primarily comprise: (i) basic property management services to commercial properties; and (ii) commercial operational and value- added services, details of which are set out as follows:

Basic property management The basic property management services to services to commercial commercial properties that we provide to properties commercial properties are similar to those we provide to residential properties. See “– Residential Property Management Services – Basic Property Management Services to Residential Properties – Scope of Services” for details.

Commercial operational and Office administration services. We assist tenants value-added services with work travel booking, centralized purchasing of office supplies, front desk reception and other office administration services. We provide air cleaning services and the maintenance services for leatherware, interior stones and other furnishing and decoration. We also help them maintain a comfortable work ambience with supplies of air- conditioning and drinking water, and assist them in organizing office cultural events and other corporate activities as requested.

Conference reception services. We provide conference reception services to tenants as requested. Such services typically include conference room booking and hourly leasing, supply purchasing, conference venue preparation, conference hosting and reception services.

Furnishing and decoration services. We assist property owners and tenants in furnishing and decoration of their respective units rented within the commercial properties to make them suitable for their business uses.

Special cleaning and greening services. We provide special cleaning and greening services to tenants as requested, typically for their respective units rented within the commercial properties.

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Tenant sourcing services. We help property owners of commercial properties identify and solicit target tenants, assist the property owners in optimizing the tenant mix and arrange the signing of tenancy agreements.

Commercial property transaction assistance services. We assist the property owners and property purchasers in selling and buying commercial properties. We help property owners promote their commercial properties and identify the suitable buyers, while also help property purchasers identify available commercial properties that suit their business needs. We then help both sides consummate the property transaction.

Service Fees under Commercial Property Management Service Segment

Service Fees Charged on a Fixed Fee Basis

For the basic property management services that we provided to all of our commercial property projects, we charge property management fees on a lump-sum basis. We provide these services through our own employees and subcontractors. We are entitled to retain the full amount of these fees collected from property owners or tenants as revenue and bear the costs incurred in providing such services.

Prior to negotiating and entering into agreements with the property owners or tenants we seek to form an estimate as to our cost of services. Our cost of services includes, among others, labor costs, subcontracting costs, recorded as cleaning, greening, maintenance, security and fire protection costs, and utility expenses. As we bear such expenses ourselves, our profit margins are affected by our ability to reduce our cost of services. In the event that we experience unexpected increases in our cost of services, we may, according to the term of relevant agreements, propose to raise our service fees while negotiating to renew the relevant agreements.

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The following table sets forth the average property management fee per sq.m. of the commercial properties under our management by developer type for the years indicated.

Property projects under management For the year ended December 31, 2018 2019 2020 RMB per sq.m. per month

Notes:

(1) Refers to properties solely developed by R&F Group or jointly developed by R&F Group and independent third-party property developers in which R&F Group held a controlling interest.

(2) Refer to properties jointly developed by R&F Group and independent third-party property developers in which R&F Group did not hold a controlling interest.

(3) Refer to properties developed solely by independent third-party property developers.

In 2018, 2019 and 2020, we incurred losses of RMB23.3 million, RMB13.8 million and RMB9.2 million, respectively, with respect to 51, 53 and 52 commercial property projects under our management, respectively. Such losses were primarily due to the relatively low property management fees and the relatively high labor cost and maintenance costs of these properties. We plan to turn around our operations in relation to these properties by (i) actively communicating with the relevant property owners and tenants to renegotiate our fee rates upon renewal of the relevant property management service agreements; (ii) further streamlining our business operations and improve the efficiency of our employees leveraging economies of scale as well as our various information systems; and (iii) promoting community value-added services in those properties, which typically generates higher profit margins than property management services. Our revenue from property management services from such loss-making properties was approximately RMB95.5 million, RMB80.7 million and RMB59.5 million in 2018, 2019 and 2020, respectively, representing 16.3%, 13.0% and 9.1% of our total revenue from basic property management services to commercial properties for the same years, respectively. As of the Latest Practicable Date, 32 of the loss-making commercial property projects under our management as of December 31, 2020 had turned profitable. See “Risk

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Factors – Risks Relating to Our Business and Industry – We may be subject to losses and our profit margins may decrease if we fail to control our costs in rendering our property management services on a lump sum basis.”

During the Track Record Period, the average property management fees charged for commercial properties developed by R&F Group were generally higher than those charged for commercial properties developed by joint ventures or associates of R&F Group and independent third-party property developers, primarily due to the multiple quality office buildings developed by R&F Group located in first-tier, new first-tier and second-tier cities, for which we typically charge higher property management fees.

We also charge fixed service fees based on the nature and amount of the services according to a pre-determined fee schedule for our office administration services, conference reception services and furnishing and decoration services, and we also charge fixed service fees per sq.m. for our special cleaning and greening services, with reference to the costs incurred in our provision of services, including without limitation, labor costs and costs of supplies and materials needed for the services.

Service Fees Charged on an Income Sharing Basis

For the tenant sourcing services and commercial property transaction assistance services, we generally charge our customers a pre-agreed percentage of the transaction amount as our service fees. We recognize the service fees as revenue and our cost of services mainly includes labor costs.

Our Pricing Policy

We generally price our commercial property management services charged on a fixed fee basis, with reference to, among others, (i) brand, size and location of a commercial property; (ii) availability of utilities; (iii) level of complexity of the services required; and (iv) the service period. For our services charged on an income sharing basis, we price mainly with reference to market standard and the rate charged by our competitors within the same area.

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Payment and credit terms

We set forth below the typical payment and credit terms of our service fees by type of contract during the Track Record Period:

Type of services Payment and credit terms

Basic property management similar to the payment and credit terms for services to commercial residential properties. See “– Residential Property properties ...... Management Services – Basic Property Management Services to Residential Properties – Payment and Credit Terms” for details

Office administration services .... fixed service fees payable according to the payment methods agreed on the service order confirmation sheet, typically including payment in cash, by check or via transfer made at the time of confirming the services or made monthly after being invoiced

Conference reception services .... fixed service fees payable according to the payment methods agreed on the service order confirmation sheet, typically including payment in cash, by check or via transfer made at the time of confirming the services or made monthly after being invoiced

Furnishing and decoration fixed service fees payable according to the services...... payment methods agreed on the service order confirmation sheet, typically including payment in cash, by check or via transfer made at the time of confirming the services or made monthly after being invoiced

Special cleaning and greening fixed service fees paid monthly services......

Tenant sourcing services ...... servicefeesata pre-agreed percentage of the transaction amount paid via bank transfers on the date specified in the relevant agreement, typically the date of signing the agreement

Commercial property transaction service fees at a pre-agreed percentage of the assistance services ...... transaction amount paid via bank transfers on the date specified in the relevant agreements, typically the date of signing the agreement

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Commercial property management service contracts

We generally obtain the service contracts for our basic property management services to commercial properties and commercial operational and value-added services for commercial properties through business negotiations at arm’s length. The key terms of the major service agreements in our commercial property management service segment during the Track Record Period are summarized as follows:

Key Terms of Property Management Service Agreements for Commercial Properties

We enter into property management service agreements with customers such as property owners and property developers for the management of commercial properties. Our property management service agreements for commercial properties typically include key terms which largely track the terms contained in property management service agreements for residential properties under our management, such as scope of services, performance standards, property management fees, the parties’ respective rights and obligations, terms of service and dispute resolutions.

Key Terms of Special Cleaning and Greening Service Agreements for Commercial Properties

Our special cleaning and greening service agreements with tenants typically include the following key terms:

• Scope of services. The agreement sets forth our scope of services, which typically includes cleaning and greening services for respective units rented within the commercial properties.

• Performance standards. The agreement sets forth specific quality standards for our main services.

• Our obligations. We are required to develop a service plan based on the property environment and the performance standards set forth in the agreements. We provide the services according to the performance standards, which is subject to the supervision of the tenants.

• Tenant’s obligations. The tenant is required to, among others, pay service fees in full and on time, support and assist in our services, instruct their employees to keep the premises clean and maintain the decorative plants.

• Dispute resolution. Both parties are typically required to resolve any contractual disputes through negotiations first before resorting to litigation.

• Termination. Either party may notify the other party 60 days in advance and pay the stipulated damages to terminate the agreements before they expire.

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Key Terms of Agreements for Tenant Sourcing Services and Commercial Property Transaction Assistance Services

Our agreements with lessors and lessees for tenant sourcing services and property sellers and purchasers for commercial property transaction assistance services typically include the following key terms:

• Details of the property. A typical agreement sets forth the location, size and other details of the property being transacted.

• Service fees. A typical agreement sets forth the amount of our services payable by the lessor and/or the lessee for tenant sourcing services, or the property seller and/or the property buyer for commercial property transaction assistance services.

• Lessor/lessee’s or property seller/purchaser’s obligations. The lessors and/or lessees for tenant sourcing services, and the property sellers and/or purchasers for commercial property transaction assistance services are required to timely pay services fees to us in full according to the agreements. For overdue service fees, they need to pay a penalty equal to a daily-accumulating surcharge at a certain percentage of the overdue amount. They are also responsible for the accuracy of the identification and other documents provided for the purpose of the property transaction.

• Dispute resolution. Both parties are typically required to resolve any contractual disputes through negotiations first before resorting to arbitration.

EFFECT OF THE COVID-19 PANDEMIC

An outbreak of respiratory illness caused by a novel coronavirus, namely COVID-19, was reported in December 2019 and continues to expand globally. 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.

Effects of the COVID-19 Pandemic on Our Business Operations

According to CIA, the PRC property management industry is under pressure in the short term as property management companies are required to suspend certain services and incur additional costs to comply with additional regulations and government measures. To comply with government regulations and measures to combat the COVID-19 pandemic, we assigned additional staff and incurred additional medical material costs. See “– Our Response to the COVID-19 Pandemic.” Certain of the sales offices and show flats we managed suspended operations after the outbreak of the COVID-19 pandemic during January to March 2020 as result of government requirements, decrease in demand, and changes in property developers’ business plans. Despite that our revenue from sales office management services in the three months ended March 31, 2020 decreased by 13.2% compared to the three months ended March 31, 2019 due to the COVID-19 pandemic, our revenue from sales office management services in 2020 increased by 48.7% from 2019.

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Since the outbreak of the COVID-19 pandemic and up to the Latest Practicable Date, we had not encountered any material disruption to the services provided by our subcontractors and utilities service providers and the supply of materials from our suppliers. Our Directors consider that while the supply chains in all industries will be affected to a certain extent by the COVID-19 pandemic, particularly due to the prolonged suspension of business operations and the instability of a workforce arising from the mandatory quarantine requirements, in view of the nature of our business, our Directors do not expect that we will encounter any material disruptions of our supply chain given that we do not rely on any particular service subcontractors or material suppliers and there are many other subcontractors and suppliers in the market as back-up. In view of the foregoing, our Directors believe that we can continue to provide our services and discharge our obligations under existing contracts.

To the best knowledge of our Directors after consulting R&F Group, we do not anticipate there will be any material delay in sales, construction and delivery of the properties developed by R&F Group, joint ventures and associates of R&F Group and independent third-party property developers for our management as scheduled. We were informed by R&F Group that while R&F Group anticipated certain delay in certain stages of its overall property development progress as a result of the business suspension imposed by the PRC Government in curbing the COVID-19 pandemic, R&F Group expected that it has sufficient resources, capability and capacity to catch up with the process of developments and did not anticipate significant delay in completing the developments of the aforesaid properties. After consulting with R&F Group, our Directors are of the view that nothing has come to their attention which would suggest otherwise. Accordingly, we believe such delay would not be significant and will unlikely have material adverse impact on our financial condition.

In the long term, however, the COVID-19 pandemic is expected to bring about positive changes to the property management industry. During the fight against the COVID-19 pandemic, property management companies played a significant role, serving as a bridge among the government, community workers and residents. We believe our efforts to control the outbreak has earned us higher degrees of trust and reliance from property owners and residents at properties under our management. 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, such as our group purchase facilitation services, which we believe presents us significant opportunities to expand our related service offerings. 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.

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Our Response to the COVID-19 Pandemic

In response to the COVID-19 pandemic, we have adopted the following hygiene and precautionary measures across the properties under our management since late January 2020.

• Communications with the relevant government authorities. We have been closely following the latest regulatory measures on combatting the COVID-19 pandemic in terms of checking the health status of property owners and our employees, and timely reporting potential issues to the relevant authorities.

• Entrance management. We verify the identities of all people and vehicles entering properties under our management, and check the body temperature of every person that pass through our gates.

• Activity suspension. We suspended various playgrounds and recreation centers and other facilities under our management, and cancelled various community cultural events to reduce gathering of people.

• Disinfection. We spray disinfectants in public facilities, building corridors, elevators and other public spaces under our management at least twice a day.

• Garbage disposal. We timely remove and transport garbage away from properties under our management, and designate specialized collection and disposal sites for used masks, gloves and other potentially hazardous materials.

• Property owner education. We actively inform property owners through WeChat groups and community posters regarding the latest policies and measures on the COVID-19 pandemic as well as our plans as a property management service providers.

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Effects of the COVID-19 Pandemic on Our Business Strategies

According to CIA, the COVID-19 pandemic is expected to bring about positive changes to the property management industry, particularly in terms of increasing needs for intelligent and digital technologies for property management services, emerging customer demands for community value-added services that make the property owners and residents live easier and the increasing importance on property management companies’ brand value and reputation. We therefore believe that our expansion plan as discussed in “– Business Strategies” is feasible, and we currently expect that it is unlikely that we would change the use of the net proceeds received by our Company from the [REDACTED] as disclosed in “Future Plans and Use of Proceeds” in this Document as a result of the COVID-19 pandemic.

SMART INFORMATION PLATFORM

We have implemented a smart information platform leveraging internet, Internet-of- Things (IoT) and artificial intelligence (AI) technologies, which we believe enhance our capabilities to improve customer experience, reduce reliance on manual labor, and lower operating costs. Such information systems primarily include (i) Zizai Platform System (自在平台系統); (ii) Zizai Butler (自在管家) mobile application and (iii) Zizai Community (自在社區) mobile application. This following diagram depicts the interaction between our customers, our staff, our vendors and our smart information platform.

Property owners’ Vendors’ mobile mobile end end Our staff’s Mobile application Applet for merchants mobile end for property owners; Mobile application Applet for for staffs property owners

Zizai Community

Our system’s PC end Fee collection management; Report for repair; Vendors’ PC end Vendor management; Goods management; … Order management; …

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Zizai Platform System

Leveraging technologies such as IoT, AI and facial recognition technologies, we consolidate a series of smart systems to improve operational efficiency, ensure consistent service quality and enhance our customers’ satisfaction. Zizai Platform System primarily includes:

Mobile property management system: Our mobile property management system automatically classifies and assigns the customers’ service requests to our relevant staff, update the customers with the status on their service requests and help staff to respond to the customers’ requests and messages. The mobile property management system helps us standardize our operation procedures and enhance our operating efficiency and quality control.

Smart car park system: Our smart car park system uses car plate recognition technologies to identify property owners and residents’ vehicles at the entrance and connects to our database and other information systems for our daily management of vehicles entering and exiting the communities under our management. Our car parks also have self-serving payment equipment, which alleviates the pressure of increasing labor cost and improves the operating efficiency of the car parks under our management.

Mobile fee collection system: Our mobile fee collection system allows our property owners and residents to pay property management fees on our Zizai Community mobile application and Zizai Community Enjoy applet. Property owners and residents can also visit our office and scan the QR code to make online payment.

AI smart eye system: Our AI smart eye system implements IoT and AI technology to work with our video surveillance system to record, trace and analyze the pedestrians’ entering and exiting of the buildings and their directions. The system also use big data analytical capabilities to summarize and analyze the traffic flow and help us identify abnormal situations in the common area of the properties under our management and prevent external intrusion.

Smart security system: Our smart security system features 24/7 video surveillance and patrolling, which helps identify non-resident visitors that enter the community and monitor the perimeters of the communities under our management to better safeguard property owners and residents.

Smart door control system: Our smart door control system can identify property owners and residents at the entrance using facial recognition technologies. This allows property owners and residents to pass the entrance without noticing the check-in process. Residents and visitors can also scan QR code or use their Zizai Community mobile application to open community gates and building doors through Bluetooth or Wi-Fi technologies. The smart door control system improves the convenience for the property owners and residents while ensuring the security of the properties under our management.

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Zizai Butler Mobile Application

To improve our employees’ work performances, we have launched the Zizai Butler mobile application, which has covered all of our onsite staff. Our Zizai Butler mobile application has the following primary functions:

• Service quality control. Zizai Butler mobile application allows service quality check at project, regional company and headquarter levels. At project level, the application may initiate and assign work orders and notify our staff of work assignments, to smoothen the internal work procedure. At regional company level, our staff may use the application to generate the quality check plans and to complete and submit the quality check reports. The application allows our headquarter to keep track of our staff’s performance at each project.

• Customer service. Zizai Butler mobile application is linked to Zizai Platform System to identify the customers who made service requests and help our staff to keep track of details on their service requests in order to improve our operating efficiency and service quality.

• Patrolling management. Check points for security patrolling are recorded into our system through NFC and Bluetooth technologies and Zizai Butler mobile application helps us manage the route and timeline of the security patrolling. Issues discovered during the security patrolling may also be submitted through the mobile application for other specialized staff’s further handling.

Zizai Community Mobile Application

We also implemented Zizai Community mobile application since 2016, and had since attracted over 1.8 million registered users as of December 31, 2020. It was specially developed for our business purposes by an Independent Third Party. Such Independent Third Party owns and operates Zizai Community mobile application which we are licensed to use. Currently the application has over ten basic functions. Our Zizai Community mobile application primarily includes the following functions:

• Online payment. Users are able to verify their identities by uploading government issued ID, after which they may pay for various services online instead of physically visiting our offices. In particular, users can monitor the amount of property management fees, carpark related fees and other temporary service fees that are due, past due and paid, and make the relevant payments on the mobile application.

• Service request. Users can contact our staff to make service requests through instant messages, and may also request various property management services through the mobile application, such as housekeeping, furnishing and repair and maintenance, community group purchase facilitation services. Users can also track the status of their requests and submit evaluation or complaints.

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• Community social media. Users can share information and ideas and communicate with each other on the social media platform in the mobile application.

• Door control – Users can use the mobile application to open community gates and building doors through Bluetooth or Wi-Fi technologies.

• Visitor management – Users can make appointments for visitors, which will facilitate their check-in procedure at the gate.

• Group purchase facilitation and ticketing agency services – Users can also participate in group purchase and request ticketing agency services. See “– Residential Property Management Services – Community Value-Added Services – Community Living Services.”

According to the Administrative Measures on Internet Information Services (《互聯網信息服務管理辦法》) issued by the State Council which came into effect on September 25, 2000 and was revised on January 8, 2011, internet information services refer to the provision of information to web users through the internet, which can be divided into commercial internet information services and non-commercial internet services. Commercial Internet information services refer to paid services of providing information to or creating web pages for web users through the internet. Non-commercial internet information services refer to free services of providing public, commonly shared information to web users through the internet. Entities engaging in providing commercial internet information services shall apply for a license for value-added telecommunication services of internet information services. As for the operations of non-commercial internet information services, only filings with the relevant authority of the PRC Government are required. As Zizai Community mobile application is not owned or operated by us, our PRC Legal Advisors are of the view that we are not required to obtain the license for commercial internet information services or the filing for non-commercial internet information services.

Zizai Community Enjoy Applet

We also launched our Zizai Community Enjoy (自在社區享家) applet on WeChat, where our property owners may make online payments for property management fees, make service requests and submit complaints, contact our service personnel, pay for parking fees, control community door access, manage visitors and manage invoices. As Zizai Community Enjoy Applet is not owned or operated by us, our PRC Legal Advisors are of the view that we are not required to obtain the license for commercial internet information services or the filing for non-commercial internet information services.

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Data Security and Privacy

We have adopted various internal control measures to ensure data security and privacy protection in relation to our internal operational data, as well as external data, such as customer data obtained through our information systems. We have showed the terms and conditions to customers and have also gained their prior consent before collecting their data. In particular, we have adopted the following measures to control access and use of data.

• We implement strict access control to our physical server rooms and various online applications and systems, and only grant access to employees with legitimate business needs at the appropriate level.

• All unnecessary access to our database is prohibited. Employees can only view private data after logging into our intranet.

• The use of customer data must go through our internal approval procedure and is only allowed to the extent that it is needed for our services to such customer.

• We also conduct data backup periodically to protect the data integrity.

• We set up a detailed confidentiality policy applicable to all employees for the purpose of data protection.

SALES AND MARKETING

Our market development department is primarily responsible for creating and implementing our marketing strategy, conducting market research and organizing our sales and marketing events. We have also established regional market development teams to take charge of the sales and marketing in their respective regions. Our market development department and regional market development teams also actively communicates with leading property management companies and takes initiative to participate in industry events to learn from the advanced marketing strategy in the industry. Our market development department is also responsible for preparing for and participating in tenders to obtain new contracts with third-party property developers and maintain and strengthen our relationships with existing customers.

We also have our brand promotion department which is responsible for building up and managing our brand, and promoting our brand through online and offline channels.

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CUSTOMERS

We have a large, growing and loyal customer base primarily consisting of property owners, residents, tenants and property developers. The following table sets forth the types of our major customers for each of our three business lines.

Business Line Major Customers

Residential Property Management Service Segment – Basic property management Property owners, residents and property owners’ services to residential associations, property developers properties ...... – Value-added services to non- Property developers property owners ...... – Community value-added Property owners and residents services...... Commercial Property Management Service Segment – Basic property management Property owners and tenants services to commercial properties ...... – Commercial operational and Property owners and tenants value-added services......

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The following tables set out certain details of our five largest customers for the Track Record Period. 2018 Year starting business relationship Products/services Percentage of Relationship Rank Customer Customer Type with us provided by us Revenue total revenue with us Year RMB’000 % 1. . . . R&F Group Property developer 1997 Value-added services to non- 259,471 14.2 Related party and its joint property owners and basic ventures and property management associates services to residential properties and commercial properties 2. . . . A Bank 2009 Basic property management 6,250 0.3 Independent services to commercial Third party properties and commercial operational and value- added services 3. . . . B Bank 2009 Basic property management 4,673 0.3 Independent services to commercial Third party properties and commercial operational and value- added services 4. . . . C Provider of 2005 Basic property management 3,728 0.2 Independent machinery and services to commercial Third party mechanical properties and commercial technical operational and value- consulting added services services 5. . . . D Provider of health 2009 Basic property management 3,642 0.2 Independent products services to commercial Third party properties and commercial operational and value- added services

2019

Year starting business relationship Products/services Percentage of Relationship Rank Customer Customer Type with us provided by us Revenue total revenue with us RMB’000 %

1. . . . R&F Group Property developer 1997 Value-added services to non- 370,925 17.1 Related party and its joint property owners and basic ventures and property management associates services to residential properties and commercial properties 2. . . . E Provider of home 2018 Basic property management 7,719 0.4 Independent furnishing and services to commercial Third party constructing properties and commercial materials operational and value- added services

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Year starting business relationship Products/services Percentage of Relationship Rank Customer Customer Type with us provided by us Revenue total revenue with us RMB’000 %

3. . . . A Bank 2009 Basic property management 5,847 0.3 Independent services to commercial Third party properties and commercial operational and value- added services 4. . . . B Bank 2009 Basic property management 5,301 0.2 Independent services to commercial Third party properties and commercial operational and value- added services 5. . . . C Provider of 2005 Basic property management 3,742 0.2 Independent machinery and services to commercial Third party mechanical properties and commercial technical operational and value- consulting added services services

2020 Year starting business relationship Products/services Percentage of Relationship Rank Customer Customer Type with us provided by us Revenue total revenue with us RMB’000 % 1. . . . R&F Group Property developer 1997 Value-added services to non- 608,831 23.4 Related party and its joint property owners, basic ventures and property management associates services to residential properties and commercial properties 2. . . . E Provider of home 2018 Basic property management 11,950 0.5 Independent furnishing and services to commercial Third party constructing properties and commercial materials operational and value- added services 3. . . . A Bank 2009 Basic property management 5,396 0.2 Independent services to commercial Third party properties and commercial operational and value- added services 4. . . . B Bank 2009 Basic property management 5,066 0.2 Independent services to commercial Third party properties and commercial operational and value- added services 5. . . . D Provider of health 2009 Basic property management 3,643 0.1 Independent products services to commercial Third party properties and commercial operational and value- added services

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As of the Latest Practicable Date, save for disclosed above, none of our Directors, their close associates or any Shareholders who, to the knowledge of our Directors, owns more than 5% of our issued share capital had any interest in any of our five largest customers (other than R&F Group).

SUPPLIERS

The following table sets forth the types of our major suppliers for our three business lines.

Business Line Major Suppliers

Residential Property Management Services Basic property management Subcontractors providing cleaning and greening services to residential properties services and repair and maintenance services and suppliers providing materials for service use; Value-added services to non- Subcontractors providing cleaning services and property owners ...... repair and maintenance services and suppliers providing materials for service use;

Community value-added services . . Subcontractors providing repair and maintenance services, and suppliers of merchandise under our community living services. Commercial Property Management Services: Basic Property management Subcontractors providing cleaning and greening services to commercial services and repair and maintenance services properties ...... and suppliers providing materials for service use;

Commercial operational and Subcontractors providing cleaning and greening value-added services ...... services and repair and maintenance services and suppliers providing materials for service use.

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The following tables set out details of our five largest suppliers for the Track Record Period.

2018

Year starting business Percentage relationship Products/services Purchase of total Relationship Rank Supplier Supplier Type with us provided to us amount purchase with us RMB’000 %

1. . . . A Provider of elevators, 2011 Elevator maintenance 32,709 6.9 Independent mechanical technical services Third party consulting services and maintenance services 2. . . . B Provider of cooling 2008 Cooling services 17,275 3.7 Independent services Third party 3. . . . C Provider of food products 2013 Food supply services 10,065 2.1 Independent Third party 4. . . . D Provider of cleaning 2015 Clean outsourcing 6,532 1.4 Independent services Third party 5. . . . E Provider of fire 2018 Fire protection and 6,279 1.3 Independent protection and maintenance Third party maintenance

2019

Year starting business Percentage relationship Products/services Purchase of total Relationship Rank Supplier Supplier Type with us provided by us amount purchase with us RMB’000 %

1. . . . A Provider of elevators, 2011 Elevator maintenance 45,927 8.6 Independent mechanical technical services Third party consulting services and maintenance services 2. . . . B Provider of cooling 2008 Cooling services 18,906 3.6 Independent services Third party 3. . . . D Provider of cleaning 2015 Clean outsourcing 10,333 1.9 Independent services Third party 4. . . . C Provider of food products 2013 Food supply services 9,917 1.9 Independent Third party 5. . . . F Provider of cleaning 2013 Clean outsourcing 6,499 1.2 Independent services Third party

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2020

Year starting business Percentage relationship Products/services Purchase of total Relationship Rank Supplier Supplier Type with us provided by us amount purchase with us RMB’000 %

1. . . . A Provider of elevators, 2011 Elevator maintenance 51,724 7.6 Independent mechanical technical services Third party consulting services and maintenance services 2. . . . B Provider of cooling 2008 Cooling services 16,928 2.5 Independent services Third party 3. . . . D Provider of cleaning 2015 Clean outsourcing 13,331 2.0 Independent services Third party 4. . . . C Provider of food products 2013 Food supply services 8,493 1.3 Independent Third party 5. . . . E Provider of fire 2018 Fire protection and 6,925 1.0 Independent protection and maintenance Third party maintenance

During the Track Record Period, we did not experience any material delay, supply shortages or disruptions in our operations relating our suppliers, or any material product claims attributable to our suppliers. As of the Latest Practicable Date, save for disclosed above, none of our Directors, their close associates or any Shareholders who, to the knowledge of our Directors, owned more than 5% of our issued share capital had any interest in any of our five largest suppliers. We do not have any long-term agreements with our top five suppliers. We typically enter into one-year agreements with our suppliers and renew them after negotiations. Payments to suppliers are typically settled according to relevant contracts via bank transfers or checks.

Subcontracting

We outsource certain labor-intensive services and specialized services, primarily including cleaning, greening and gardening, and repair and maintenance services, to subcontractors, which enables us to reduce our operating and labor costs, improve service quality and dedicate more resources to management and other value-added services. We believe such subcontracting arrangements allow us to leverage the human resources and technical expertise of the subcontractors, and enhance the overall profitability of our operations. In 2018, 2019 and 2020, our cleaning, greening, maintenance, security and fire protection costs, which were primarily outsourced to third-party subcontractors, amounted to RMB215.2 million, RMB260.7 million and RMB373.0 million, respectively, which accounted for approximately 13.9%, 14.6% and 19.1%, respectively, of our total cost of sales.

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As of the Latest Practicable Date, none of our Directors, their close associates or any Shareholders which, to the knowledge of our Directors, owned more than 5% of our share capital had any interest in any of our five largest subcontractors.

Selection and Management of Subcontractors

We aim to create and maintain an effective and comprehensive system for subcontractor management. We constantly monitor and evaluate the subcontractors on their ability to meet our requirements. To ensure the overall quality of our subcontractors, we maintain a list of subcontractors based on our series of assessment standards, including, among others, the amount of registered capital, length of existence, size of overall operations, industry credentials and past cooperation with us. After initial evaluation of subcontractors, we also regularly review the performance of subcontractors and disqualify subcontractors that do not meet our requirements from the list. We only accept bidding from the subcontractors on the list for subcontracting jobs.

Key Terms of Our Subcontracting Agreement

A typical subcontracting agreement entered into between subcontractors and us generally includes the following key terms:

• Term. A subcontracting agreement typically has a term of approximately one year and may be renewed upon mutual consent.

• Our responsibilities. We are typically responsible for providing onsite personnel dispatched by the subcontractor with necessary working space, tools and materials. We are also responsible for supervising and providing feedback on the work performed by the personnel dispatched by the subcontractor.

• Obligations of the subcontractor. The subcontractor is typically responsible for providing services in accordance with the scope, frequency and standards prescribed in the relevant subcontracting agreement and in compliance with all applicable laws and regulations. In the event of substandard performance, the subcontractor is required to take necessary rectification measures within the period required by us, failing which we have the right to claim damages and penalties, or terminate the contract. The subcontractor is required to manage its personnel providing the contracted services and there is no employment relationship between us and the personnel of the subcontractor.

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• Risk allocation. The subcontractor is responsible for any damages to property or personal injuries caused by the fault of the subcontractor in the course of providing the contracted services. We typically require the subcontractor to indemnify us for any damages that it causes to the properties of the residents and us. The subcontractor is also required to pay all social insurance and housing provident funds contributions for its personnel in accordance with PRC laws and regulations and bear the liabilities and responsibilities in the event of any non-compliance.

• Procurement of raw materials. Raw materials are to be procured by the subcontractor. The procurement costs are usually included in the subcontracting fee.

• Subcontracting fee. Subcontracting fee is typically payable monthly, including costs incurred in connection with the procurement of raw materials, labor costs, equipment maintenance costs, tax expenses and other miscellaneous costs incurred by the subcontractor.

• Confidentiality. The subcontractors are not allowed to disclose the confidential information that they have obtained during their services. The confidentiality clause survives the termination of the agreement.

• Anti-bribery. We and our employees are forbidden from requesting bribes from the subcontractor in any forms, and the subcontractor is forbidden from offering any financial assistance or other forms of bribes to our employees. The agreement provides ways for subcontractors to report inappropriate behaviors by our employees, and we reserve the right to pursue legal actions if subcontractor’s breach of its anti-bribery obligations causes damages to us.

• Termination. The agreement is terminated when the term of the contract expires. We may also terminate the agreement if the subcontractor provides substandard performances for multiple times. We may also terminate the agreement if the subcontractor breaches provisions regarding anti-bribery or other material terms of the agreement.

QUALITY CONTROL

We believe quality control is crucial to the long-term success of our business. We have a professional quality control team which primarily focuses on maintaining service standards, standardizing service procedures and supervising service quality throughout our operational processes.

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Quality Control over Property Management Services

We renewed the international quality management system certification according to ISO9001:2015 standards in 2019. We also obtained ISO14001:2015 environmental management certification and ISO45001:2018 occupational health and safety management system certification in recognition of our service quality. We implement a “three-in-one” quality control system by aligning quality, environment protection and occupational health, which provides an all-round quality control guidance to our daily operations and minimize disruption to our operations and related operation costs.

In order to ensure service and consumer satisfaction, we set up quality check scheme based on the customers’ service needs, our internal policy on service standards and relevant laws and regulations and conduct internal reviews on consumer satisfaction at all properties under our management on a annually basis. The quality check and consumer satisfaction results factor in the performance review of, among others, interaction with customers and key aspects in our daily services provided to our customers.

Quality Control over Subcontractors

We typically include in the agreements with subcontractors detailed quality standards for the services to be provided. We regularly monitor and evaluate the performance of the subcontractors and may require the subcontractors to take necessary rectification measures when their services do not meet the agreed standards. We also conduct annual surveys among property owners and residents regarding the quality of services provided by our subcontractors. We have the contractual right to adjust the subcontracting fees and decide whether to continue our subcontracting contract depending on the outcomes of such surveys. See “– Suppliers – Subcontracting – Selection and Management of Subcontractors.”

Quality Control over Third-party Vendors

We implement a various measures and policies to ensure the quality of the products and services offered by third-party vendors, such as screening candidate vendors by examining their qualifications and conducting onsite inspection of their business premises, before entering into cooperation agreements with them. We also conduct annual assessment on our vendors in respect of transaction volume, service quality and after-sales services. We also have the right to replace a third-party vendor in the event of substandard performance.

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Feedback and Complaint Management

During the ordinary course of our business, we receive feedback, suggestions and complaints, such as request for repair of public facilities, from property owners and residents of the properties we manage from time to time regarding our services. We have established internal procedures to record, process and respond to the feedback, suggestions and complaints and conduct follow-up reviews of the results of our responses.

In order to provide better customer experience and enhance our customer service, we offer a service hotline (400-850-2777) for residents living in the residential properties we manage, which has been up and running since 2017. Through the hotline, our customers can inquire about our services, provide us with their complaints and feedback, and we can follow up and respond in time to provide timely and efficient solutions to the problems of our clients. In addition, property owners and residents can request repair and maintenance services, provide their feedbacks, suggestions and complaints through Zizai Community mobile application or using Zizai Community Enjoy applet. We also organize regular meetings with our customer on a quarterly basis to collect their suggestions and complains on our services. Every year, we also invite some property owners to conduct quality check anonymously and directly present their feedback to our customer service supervision center at the group level, which will make sure the relevant project company to take rectification measures for issues reported by our customers.

During the Track Record Period, we did not experience any customer complaints about our services or products that would have a material adverse impact on our operations or financial results.

INTELLECTUAL PROPERTY

We consider our intellectual property rights as critical to our success. We primarily rely on laws and regulations on trademarks and trade secrets and our employees’ and third parties’ contractual commitments to confidentiality and non-competition to protect our intellectual property rights. As of the Latest Practicable Date, we had obtained two registered trademarks, one patent and one domain name in the PRC.

As of the Latest Practicable Date, we were not aware of any infringement which could have a material adverse effect on our business operations by our Group against any intellectual property rights of any third party or by any third party against any intellectual property rights of our Group, or any disputes with third parties with respect to intellectual property rights.

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AWARDS

The following table sets forth a selection of the notable awards and accreditations we received.

Awarding Year Award/Recognition Awarding Entity

2021 ..... Top100Property Management Service Companies in China Index Academy China (Ranked 11th) (中國物業服務百強企業TOP 100 (排名第11)) 2021 ..... Top100China Property Service Leading Enterprise in China Index Academy terms of Customer Satisfaction (Ranked 8th) (中國物業服務百強滿意度領先企業TOP 100 (排名第8)) 2021 ..... ChinaLeadingProperty Management Companies in China Index Academy terms of Characteristic Service—Community Value- added Services (中國特色物業服務領先企業—社區增值服務) 2021 ..... ChinaSpecial Property Management Exceptional China Index Academy Companies—Exceptional Commercial Property Management Service Companies (中國專項物業服務優秀企業—商業物業管理優秀企業) 2020 ..... Specialized Operational Leading Brand of China China Index Academy Property Service Companies (中國物業服務專業化運營領先品牌企業) 2020 ..... Top10ChinaProperty Management Service Enterprise China Index Academy in terms of Business Size (Ranked 8th) (中國物業服務百強企業服務規模TOP 10 (排名第8)) 2020 ..... Top50ChinaProperty Service Companies in terms of Cric China Property Service Capabilities (中國物業服務力TOP50) Management Research (克而瑞物管) 2020 ..... Quality Service Brand of China Property Service Cric China Property Companies—R&F Property Happiness Butler System Management Research (中國物業優質服務品牌—富力物業幸福管家體系) (克而瑞物管) 2020 ..... Outstanding Commercial Property Operational Service China Index Academy Brand in China (中國商業物業服務優秀品牌) 2020 ..... ChinaBenchmarkServiceProject in terms Cric China Property of Service Capabilities-Guangzhou R&F Tianhe Management Research Prosperous Place (中國物業服務力標桿項目-廣州富力 (克而瑞物管) 天河華庭) 2020 ..... ChinaBenchmarkServiceProject in terms Cric China Property of Service Capabilities-Guangzhou R&F Yingkai Management Research Square (中國物業服務力標桿項目-廣州富力盈凱廣場) (克而瑞物管) 2019 ..... 2019LeadingCommercial Property Service Enterprise China Property (2019商業物業服務領先企業) Management Institute (中國物業管理協會)

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COMPETITION

According to CIA, the PRC property management industry is fragmented and competitive, with approximately 130,000 property management service providers operating in the industry in 2019. As a property management company with national presence, we compete with both national and regional property management companies in terms of property management companies, and with other providers of similar services in terms of our value-added services. Moreover, according to CIA, there are several barriers for players in China’s property management industry to successfully compete and achieve sustainable growth, such as brand value and availability of talent and technical expertise, which we believe we have and will continue to overcome. For more information on the industry and the markets that we operate in, see “Industry Overview” and “Risk Factors – Risks Relating to Our Business and Industry – We face a wide range of competition and may fail to compete effectively and operate profitably.”

SOCIAL, HEALTH, SAFETY AND ENVIRONMENTAL MATTERS

We are subject to PRC laws in relation to labor, safety and environment protection matters. In addition, we have established occupational safety and sanitation systems, implemented the ISO14001:2015 and ISO45001:2018 standards certified by the China Quality Certification Center, and provided employees with workplace safety trainings on a regular basis to increase their awareness of work safety issues. We also assign security personnel and provide 24-hour safely and security patrol at each of properties under our management to help promote the safety and security of the property owners and residents.

We hire employees based on their merits and it is our corporate policy to offer equal opportunities to our employees regardless of gender, age, race, religion or any other social or personal characteristics. During the Track Record Period and up to the Latest Practicable Date, we had complied with PRC laws in relation to workplace safety in all material respects and had not had any incidents which have materially and adversely affected our operations.

We consider the protection of the environment to be important and have implemented measures in the operation of our businesses to ensure our compliance with all applicable requirements. Given the nature of our operations, we do not believe we are subject to material environmental liability risk or compliance costs. During the Track Record Period and up to the Latest Practicable Date, we have not been subject to any material administrative penalties due to violation of environmental laws in China.

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Since our inception, we have been dedicated to serving the communities where we operate, and have implemented the following measures to fulfill our social responsibilities.

• Combat of the COVID-19 pandemic. Since the outbreak of the COVID-19 pandemic, we have been on the frontline of preventing the spread of the pandemic, with our employees working around the clock in our property projects under management across China to safeguard the health and safety of property owners and residents. We closely verify the identities and monitor the health status of every person entering properties under our management, and offered comprehensive community living services to residents under quarantine, such as delivery of food, water and medicine.

• Employee benefits. We truly appreciate the services of our employees, and care about their wellbeing. To that end, we offer employee benefits such as subsistence allowances, vacation packages, cultural and social events and annual medical examination.

• Community cultural events. Building on our “friendly neighborhood and happy home (友鄰幸福家)” concept, we regularly organize community cultural events in residential communities under our management, such as cultural festivals and community galas, hobby groups for elderly residents, parent-child entertainment and recreational events and safety education programs for children.

EMPLOYEES

We believe that our quality personnel is our key to success and future development. We place strong emphasis on recruiting and training quality personnel. We recruit talent from various sources, such as universities, third-party recruitment agency and other companies, and provide on-going training and promotion opportunities to our staff members. As of December 31, 2020, we had a total of 22,579 full-time employees. The following table sets forth the number and breakdown of our full-time employees by function as of December 31, 2020.

Number of % of our total Function employees employees

Management ...... 495 2.2 Quality and operation management ...... 939 4.2 Administration, human resource and financial . . . 140 0.6 Property management services ...... 20,369 90.2 Value-added services ...... 598 2.6 Market development ...... 38 0.2

Total ...... 22,579 100.0

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During the Track Record Period and up to the Latest Practicable Date, our employees did not negotiate their terms of employment through any labor union or by way of collective bargaining agreements nor did we experience any material labor disputes or shortages that may have a material adverse effect on our business, financial position and results of operations.

Recruiting

We rely on high quality personnel for our consistent delivery of high quality service. We endeavor to hire the best talented employees in the market by offering competitive wages, bonus, benefits, systematic training opportunities and internal upward mobility. During our recruiting process, we seek talent that is best suited to our vacancy by sourcing through a broad range of channels, including online advertisements, universities, third-party recruiting agencies and employee referrals. Our screening and selection process primarily include (i) review and screening of resumes by the human resources department and the relevant recruiting department; (ii) face-to-face interviews by the human resources department and relevant recruiting department. Further face-to-face interviews with the candidates and approval by our headquarters are also required for important positions. Once qualified candidates are selected, we send offer letter to the candidate after the internal approval.

Training

We provide various systematic and extensive training programs to our employees. Our employee training programs primarily cover key areas in our business operations, which provide continuous training to our existing employees at different levels to specialize and strengthen their skill sets.

We offer a systematic training and rotation program for our management trainees recruited from school, to cultivate their basic skills in every aspects of the property management business and prepare them for future management responsibilities. We also provide training programs for our reserved project managers for every important aspects of operating a property management project to establish a middle-level management team that is familiar with our strategic goals and business development strategies and has strong execution capabilities. We provide leadership development training programs for our reserved general managers to help them learn the cutting-edge concepts and practical experience from other key players in the industry, in order for them to improve their overall management capabilities. In addition, we regularly organize occupational training programs tailored for employees at different positions to improve their relevant skill sets. For additional information, see “– Competitive Strengths – Experienced and visionary founders and management team, and well-established motivation mechanism and talent cultivation system.”

Social Insurance and Housing Provident Fund Contributions

According to the relevant PRC laws and regulations, we are required to make contributions to social insurance fund (including pension fund, medical insurance, unemployment insurance, work-related injury insurance and maternity insurance) and housing provident fund for the benefit of our employees in China.

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Reasons for Not Making Full Contributions

As confirmed by our Directors, we did not make full social insurance and housing provident fund contributions during the Track Record Period, primarily because (i) some of our employees voluntarily opted not to make contributions to social insurance and housing provident funds; and (ii) some migrant workers who have purchased new rural insurance at their residences requested us not to pay to social insurance and housing provident funds for them.

Legal Consequences and Potential Maximum Penalties

As advised by our PRC Legal Advisors, according to the relevant PRC laws and regulations in respect of social insurance contributions, if we do not pay the full amount of social insurance contributions as required, the relevant authorities may demand us to pay the outstanding social insurance contributions within the deadline stipulated by them and we may be liable to a late payment fee equal to 0.05% of the outstanding amount for each day of delay. We may be liable to a fine from one to three times the amount of the outstanding contributions if we fail to make such payments. In respect of outstanding housing provident fund contributions, we may be ordered to pay the outstanding housing provident fund contributions within the time period stipulated by relevant authorities. If payment is not made within such stipulated time period, relevant PRC authorities may apply to PRC courts for compulsory enforcement.

Our Directors have considered the following in assessing our exposures relating to social insurance and housing provident fund contributions: (i) as of the Latest Practicable Date, we had not received any notification from relevant government authorities requiring us to pay shortfalls or the penalties with respect to social insurance and housing provident funds; (ii) during the Track Record Period and up to the Latest Practicable Date, we had not been subject to any administrative penalties, material litigations and legal proceedings, nor were we aware of any material employee complaints nor involved in any material labor disputes with our employees with respect to social insurance and housing provident funds; (iii) a majority of our PRC subsidiaries have obtained written confirmations from competent local government authorities which confirmed that no penalties had been imposed on us with respect to social insurance and housing provident funds during the Track Record Period; (iv) we made provisions for social insurance and housing provident fund contributions of RMB2.5 million, RMB2.5 million and RMB2.2 million, respectively, in 2018, 2019 and 2020; and (v) we will make full contributions or pay any shortfall within a prescribed time period if demanded by the relevant government authorities. We believe that the provisions for social insurance and housing provident fund contributions are sufficient, having considered the above-mentioned reasons.

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Based on the foregoing, our PRC Legal Advisors are of the view that the risk that we would be subject to material administrative penalties by relevant authorities is remote. In light of the above, our Directors believe that our failure to fully contribute to social insurance and housing provident funds during the Track Record Period would not have any material adverse effect on our business operations or results of operations.

Remedial Measures

We issued an internal work plan to be implemented by our human resource and administration departments at our PRC subsidiaries in March 2021 and then our human resource and administrative center at headquarter level issued an internal guideline for each of our PRC subsidiaries in April 2021, in order to undertake rectification measures and make full social insurance and housing provident fund contributions in compliance with the applicable laws and regulations. Under these enhanced internal control measures, every month, the staff of our human resource and administrative departments at our PRC subsidiaries in charge of social insurance and housing provident funds will compile the payment schedules, and submit the schedules to the respective accounting departments for payments and accounting processing after obtaining the approvals from their respective heads of the human resource and administrative departments and the general managers of the PRC subsidiary.

OUR CASH MANAGEMENT POLICY

We have a bank account and cash management system to manage our cash inflows and outflows, applicable to all of our subsidiaries and branch offices in their ordinary course of business. Our employees are required to deposit cash received into the relevant bank accounts in the day of receipt, and must seek approval for withdrawal and usage of such cash.

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Cash handling policies and internal Cash flow transactions control measures

Cash inflow in relation to payments We typically have designated cashiers or of property management fees, customer service personnel specifically deposits, rent or service fees from our responsible for cash collection who customers ...... verify that the amount of cash collected is correct prior to issuing receipts.

Payment made to suppliers, service Payments by our subsidiaries and branches providers and subcontractors of our to their suppliers, service providers and subsidiaries and branches ...... subcontractors must be pre-approved by the responsible supervising personnel at a higher level. Once approved, such payments must be made directly from the bank accounts of our subsidiaries and branches.

Cash inventories and deposits ...... Oursubsidiaries and branch offices are typically not allowed to keep more than RMB2,000 in cash on hand. We typically require that excess amounts be deposited into the bank accounts of our subsidiaries and branch offices on the day they are received.

Cash transfers to the bank accounts of We receive cash through methods such as our subsidiaries and branch offices .... online payment, credit or debit card payments and bank transfers, and cash collected from these methods are directly deposited into the bank accounts of our subsidiaries and branch offices.

We receive cash through methods such as Our subsidiaries and branch offices must online payment, credit or debit card adhere to our internal policies and payments and bank transfers, and cash procedures in relation to the opening of collected from these methods are bank accounts. Our subsidiaries and directly deposited into the bank branch offices are typically required to accounts of our subsidiaries and branch reconcile and check bank balances on a offices...... monthly basis.

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INSURANCE

We maintain insurance policies against major risks and liabilities arising from our business operations, primarily (i) liability insurance to cover liabilities for property damages or personal injuries suffered by third parties arising out of or related to our business operations; and (ii) property insurance for damages to both movable and immovable properties owned by us or in our custody. We require our subcontractors to purchase accident insurance for their employees who provide services to our Group, and in accordance with our standard terms in the agreements between subcontractors and us, the subcontractors are responsible for all workplace injuries to their employees, except for injuries directly attributable to us.

We believe that our insurance coverage is in line with the industry practice in the PRC. However, our insurance coverage may not adequately protect us against certain operating risks and other hazards, which may result in adverse effects on our business. For more details, see “Risk Factors – Risks Relating to Our Business and Industry – Our insurance coverage may not sufficiently cover the risks related to our business.”

CERTIFICATES, LICENSES AND PERMITS

We are required to obtain and maintain various certificates, licenses and permits in relation to our operations. As advised by our PRC Legal Advisors, save as the certificates, licenses and permits that were being renewed as of the Latest Practicable Date, we obtained all material certificates, licenses and permits from relevant regulatory authorities for our main business lines as of Latest Practicable Date. We are required to renew such certificates, licenses and permits from time to time. As to the certificates, licenses and permits that were being renewed as of the Latest Practicable Date, we do not expect any difficulties in such renewals so long as we meet the applicable requirements and conditions set by the relevant government agencies and adhere to procedures set forth in relevant laws and regulations.

PROPERTIES

As of the Latest Practicable Date, we owned one property in China with an aggregated GFA of approximately 2,478.2 sq.m., and had obtained the relevant ownership certificate. Such property is used as clubhouse for our operation. As of the Latest Practicable Date, we also leased 28 properties in various locations in the PRC with an aggregated GFA of approximately 16,098 sq.m. for use primarily as office spaces and employee dormitories.

As of the Latest Practicable Date, we had not filed the lease agreements for nine of our leased properties with the local housing administration authorities as required under PRC law, primarily due to lack of cooperation from the landlords in registering the relevant lease agreements, which was beyond our control, or due to the nature of the properties which render them unregisterable under relevant laws and regulations. We were advised by our PRC Legal Advisors, that such non-filing of lease agreements would not affect the validity of such leases, but we might be ordered to rectify this non-compliance by competent authorities and if we do not rectify within a prescribed period, a penalty of RMB1,000 to RMB10,000 per agreement

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The lessors of seven of our leased properties could not provide relevant title certificates or proof of property rights. As advised by our PRC Legal Advisors, if third parties are able to prove that they have valid titles to or valid leasehold interests in these properties and refuse to acknowledge our lease of such properties, we may not be able to enforce the lease agreement in relation to the leased property. In the event that we are required to relocate from the leased property as a result of the foregoing, given the nature of our operation, we do not believe that any relocation would result in material disruptions to our business. Moreover, replacement premises for the leased property without title certificate and proof of property right are readily available. Although we may incur additional relocation costs, our Directors are of the view that this would not have any material impact on our business, financial position and results of operations.

We had no single property with a carrying amount of 15% or more of our total assets as of the Latest Practicable Date and, therefore, we did not need to prepare a valuation report with respect to our property interests in reliance upon the exemption provided by section 6(2) of the Companies (Exemption of Companies and Prospectuses from Compliance with Provisions) Notice (Chapter 32L of the Laws of Hong Kong).

RISK MANAGEMENT AND INTERNAL CONTROL

We have implemented various risk management policies and measures to identify, assess and manage risks arising from our operations. Details on risk categories identified by our management, internal and external reporting mechanism, remedial measures and contingency management have been codified in our policies. For details of the major risks identified by our management, see “Risk Factors – Risks Relating to Our Business and Industry.” In addition, we face various financial risks, including interest rate, price, credit and liquidity risks that arise during our ordinary course of business. See “Financial Information – Quantitative and Qualitative Analysis about Market Risk.”

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To monitor the ongoing implementation of our risk management policies and corporate governance measures after the [REDACTED], we have adopted or will adopt, among others, the following risk management and internal control measures:

• the establishment of an audit committee responsible for overseeing our financial records, internal control procedures and risk management systems. See “Directors and Senior Management – Board Committees – Audit Committee” for the qualifications and experience of these committee members as well as a detailed description of the responsibility of our audit committee;

• the appointment of Mr. Li Wenchang and Ms. Mak Po Man Cherie as our joint company secretaries to ensure the compliance of our operation with relevant laws and regulations. For their biographical details, see “Directors and Senior Management”;

• the appointment of Maxa Capital Limited as our compliance advisor upon the [REDACTED] to advise us on compliance with the Listing Rules; and

• the engagement of external legal advisors to advise us on compliance with the Listing Rules and to ensure our compliance with relevant regulatory requirements and applicable laws, where necessary.

We embed a culture of compliance in the daily work routine of our employees through regular compliance trainings, and set various expectations for our employees’ work performances in terms of compliance.

Finally, we adopt before the [REDACTED], various internal regulations against corrupt and fraudulent activities, which includes measures against receiving bribes and kickbacks, and misuse of company assets. Major measures and procedures to implement such regulations include:

• an internal policy for employee whistleblowing, which establishes additional channels for employees to report or file complaints on misconducts other than the ordinary work report channel, including in-person visits, telephone or emails to our Group’s inspection team office;

• internal policies, such as employee handbook and code of honest and self- disciplined conducts to clarify the requirements for integrity and honesty for employees at all levels and penalties for violations of relevant policies;

• internal policies to require all newly recruited employees to confirm, after receiving relevant trainings, that they will voluntarily comply with our anti-corruption and anti-bribery policies; and

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• undertaking rectification measures with respect to any identified corrupt or fraudulent activities.

Our Directors are of the view that such controls and measures are effective to avoid the occurrence of corruption, bribery, or other improper conduct of our employees. During the Track Record Period and up to the Latest Practicable Date, we were not subject to any government investigation or litigation with respect to claims or allegations of monetary and non-monetary bribery activities.

LEGAL PROCEEDINGS AND COMPLIANCE

Legal Proceedings

We have been involved in legal proceedings or disputes from time to time in the ordinary course of business, such as contract disputes with our customers, suppliers or disputes with other third parties at properties under our management. As of the Latest Practicable Date, there were no litigation or arbitration proceedings or administrative proceedings pending against us or any of our Directors which would have a material adverse effect on our business, financial position or results of operations.

Historical Non-Compliance Incidents

As advised by our PRC Legal Advisors, we had not been subject to significant fines or legal actions involving non-compliances with any PRC laws or regulations relating to our business which would have a material adverse effect on our business during the Track Record Period and up to the Latest Practicable Date.

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OVERVIEW

Immediately upon completion of the Capitalization Issue and the [REDACTED] without taking into account any Shares which may be issued pursuant to the exercise of the [REDACTED] or any options that may be granted under the Share Option Scheme, each of Mr. Li, through Virtuous Charm, Prime Elegance and Jade Concord, and Mr. Zhang, through Active Strength, Sun Arise and Grand Favour, will control more than 30% of the voting rights at the general meeting of our Company, respectively. As a result, Mr. Li, Mr. Zhang, Virtuous Charm, Prime Elegance, Jade Concord, Active Strength, Sun Arise and Grand Favour will be regarded as our Controlling Shareholder under the Listing Rules upon [REDACTED].

Each of Virtuous Charm, Prime Elegance, Jade Concord, Active Strength, Sun Arise and Grand Favour is an investment holding company. Mr. Li and Mr. Zhang are the founders and the executive Directors of R&F Properties.

DELINEATION OF BUSINESS

Our Group is primarily engaged in the provision of residential property management services and commercial property management services in the PRC.

As of the Latest Practicable Date, Mr. Li was beneficially interested in approximately 28.97% of the total issued shares of R&F Properties, a company mainly engaging in the development and sales of residential and commercial properties (including commercial operation of shopping malls) whose shares are listed on the Main Board of the Stock Exchange (stock code: 2777). Given that Mr. Li holds less than 30% of the total issued shares of R&F Properties, R&F Properties is not an associate of Mr. Li under the Listing Rules.

As of the Latest Practicable Date, Mr. Zhang was beneficially interested in approximately 27.50% of the total issued shares of R&F Properties. Given that Mr. Zhang holds less than 30% of the total issued shares of R&F Properties, R&F Properties is not an associate of Mr. Zhang under the Listing Rules.

In addition to their investment in the development and sales of properties, Mr. Li and Mr. Zhang also have invested in the equity investment management business (the “Excluded Business”). In view of different nature of the Excluded Business and the business operations of our Group, our Directors are of the view that there is a clear business delineation between our business and the Excluded Business.

As a result, none of the Excluded Businesses would compete or is expected to compete, directly or indirectly, with the business of our Group which would require disclosure under Rule 8.10 of the Listing Rules.

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OUR RELATIONSHIP WITH R&F Group

Our Group has a well-established and ongoing business relationship with R&F Group. R&F Group is a large-scale and comprehensive property developer in the PRC primarily engaged in the development of mid-to high-end residential properties and commercial properties across 7 regions of China (Northern China, Eastern China, Northwestern China, Southern China, Southwestern China, Central Southern China and Hainan) in the PRC and overseas. Since 2015, R&F Group has been ranked top ten in the “Top 500 Real Estate Enterprises in China” by the China Real Estate Association and China Real Estate Appraisal for six consecutive years. According to its annual results announcement of 2021, as of December 31, 2020, R&F Group’s attributable GFA under development was approximately 29.6 million sq.m. and the total GFA of its land bank was approximately 64.3 million sq.m. Our Group and R&F Group have a long and close business relationship. Tianli Property, the major operating subsidiary of our Group, was established by R&F Group and had been one of its subsidiaries before it was disposed of in March 2020. The development of our Group matches that of the development of the property development business of R&F Group. As such, we have been providing property management services to properties developed by R&F Group since the establishment of Tianli Property.

During the Track Record Period, we provide property management services to a substantial portion of properties developed by R&F Group. During the Track Record Period, most of our revenue and GFA under management for residential properties were contributed from residential properties developed by R&F Group and its joint ventures and associates. In 2018, 2019 and 2020, the proportion of our total revenue generated from managing residential properties attributable to the residential properties developed by R&F Group was 96.2%, 95.9% and 95.4%, respectively. As of December 31, 2018, 2019 and 2020, the proportion of our total GFA under management for residential properties attributable to the residential properties developed by R&F Group to was 95.8%, 95.0% and 94.7%, respectively. As of December 31, 2018, 2019 and 2020, the proportion of our total GFA under management for commercial properties attributable to the commercial properties developed by R&F Group was 94.2%, 94.1% and 94.3%, respectively.

We believe our on-going business relationship with R&F Group is both mutually beneficial and complementary. High-quality property management services enhance client satisfaction and add value to the market reputation of property developers for their developed properties. Thus, property developers would select and work closely with trustworthy and well-resourced property management companies which are able to provide a comprehensive range of services at higher standard. Through years of cooperation, our Group and R&F Group have developed a mutual and in-depth understanding of each other’s business operations and shared a similar service philosophy and geographic coverage. We believe that our ability to maintain a high bidding success rate for properties solely developed by R&F Group is owed to our long-standing track record to work with R&F Group, our involvement for properties developed by R&F Group at early stage of property development process and our familiarity with their needs, which enables us to reduce communication costs and provide services tailored to R&F Group’s stringent demands and requirements. See “Business – Competitive Strengths – Strong support from R&F Group lays a solid foundation for our stable and sustainable growth” for more details on the business benefits from our long-standing relationship with

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R&F Group. We believe our close and long-term cooperative relationship with R&F Group is instrumental to its success in establishing a distinguished and well-recognized brand image nationally, while enabling us to reinforce our existing market position and enhance our competitiveness in the PRC property management and commercial operation industry.

Meanwhile, our ability to maintain high retention rate with properties under our management during the Track Record Period also demonstrated the level of client satisfaction for our high quality services, which indicates our Group’s contribution to their brand image by continuously delivering quality property management services to property owners and residents of its developed properties. We believe it is commercially beneficial for both R&F Group and our Group to maintain such a stable and strategic business relationship. Our Directors therefore consider that our business relationship with R&F Group is unlikely to terminate or materially or adversely change due to its mutual and complementary nature. Going forward, based on our mutual and complementary business relationship, and considering the amount of time and efforts required to secure other service providers who can possibly provide services of comparable standard and scope, we consider we have competitive advantage which distinguishes us from our competitors and we believe will continue to secure future engagements from R&F Group.

We will continue to provide property management services to R&F Group upon [REDACTED]. Although the transactions with R&F Group would not constitute continuing connected transactions under the Listing Rules, the transactions will be carried out: (i) in the ordinary and usual course of our business; (ii) on normal commercial terms or better; and (iii) in accordance with the respective terms that are fair and reasonable. The fees to be charged for the transactions will be determined after arm’s length negotiations with reference to (i) the scope of services; (ii) the anticipated operation costs (including but not limited to labor costs, administration costs and costs of materials), and (iii) the rates generally offered by us to Independent Third Parties and the fees for similar services and types of properties in the market. Our Directors are of view that the transactions with R&F Group are fair and reasonable and are in the interests of our Shareholders as a whole. Meanwhile, we will continue to actively participate in tender and bidding processes organized by Independent Third Party property developers and property owners. We plan to use approximately [REDACTED]% of the net proceeds from the [REDACTED] to acquire other property management companies. We expect that we will be able to maintain the aggregate amounts of the transactions with R&F Group at a reasonable percentage to our total revenues after the [REDACTED].

INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS

We are capable of carrying on our business independently of our Controlling Shareholders and their respective close associates (other than our Group) after the [REDACTED]forthe following reasons:

Management Independence

Our Board comprises two executive Directors, two non-executive Directors and three independent non-executive Directors. Ms. Wang Heng, our executive Director, is the vice president of R&F Properties. As of the Latest Practicable Date, none of our Directors or the members of our senior management team held any position at companies controlled by our Controlling Shareholders or their respective close associates.

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Each of our Directors is aware of his/her fiduciary duties as a Director, which require, among other things, that he/she acts for the benefit and in the best interests of our Company and does not allow any conflict between his/her duties as a Director and his/her personal interests. In the event that there is an actual or potential conflict of interest arising out of any transaction to be entered into between our Group and any of the Directors or their respective close associates, the interested Director(s) shall abstain from voting at the relevant board meetings of our Company in respect of such transactions and shall not be counted in the quorum.

Based on the above, our Directors are of the view that our Group is capable of managing our business independently from our Controlling Shareholders and their respective close associates following the completion of the [REDACTED].

Operational Independence

Although our Controlling Shareholders will retain a controlling interest in our Company after the [REDACTED], we have full rights to make all decisions on, and to carry out, our own business operations independently of our Controlling Shareholders and their respective close associates.

Our preliminary management contracts for properties developed by R&F Group were secured primarily through standard tender and bidding processes, in which tender bids would be evaluated by tender evaluation committees established by R&F Group (in accordance with the Interim Measures for Tender and Bidding Management for Preliminary Property Management (前期物業管理招標投標管理暫行辦法)). Tender evaluation committees must consist of an odd number of no less than five members, including at least a two-thirds majority of property management experts who are independent from both our Group and R&F Group. Such experts are selected on a random basis from a list compiled by the local real estate administrative department. We do not enjoy a preferential right to be engaged as the preliminary property management service provider for projects developed by R&F Group, and our tender bids are considered on the same basis as tender bids submitted by other property management service providers during the tender and bidding process. We undergo the same tender and bidding process to secure preliminary management contracts for properties developed by Independent Third Party property developers. For more information, see “Business – Basic Property Management Services to Residential Properties – Property Management Service Agreements”.

After properties are delivered by property developers, we provide property management services directly to independent individual property owners, who may be represented by property owner associations. Such property owners have the right to engage or dismiss us as the property management service provider after reviewing and evaluating our performance. R&F Group does not have any decisive influence over the decisions of property owners to engage or dismiss property management service providers.

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As of December 31, 2020, approximately 94.7% of our total GFA under management was attributable to the projects developed by R&F Group. Despite the above, we have been able to maintain a diversified customer base, primarily by continuing our property management services to property owners or property owners’ associations after the delivery of residential properties, by participating in tender and bidding processes conducted by property developers, and by providing value-added services to other property developers. Accordingly, the majority of our customers are independent individual property owners and property owners’ associations. Our revenue generated from Independent Third Parties accounted for approximately 76.6% of our total revenue for the year ended December 31, 2020.

We believe that our GFA under management and revenue attributable to independent third-party property developers will continue to increase. We began to proactively source projects from independent third-party property developers since 2020. Despite the short history, we have been able to secure contracts for the provision of management services for properties developed by independent third-party property developers. The contracted GFA of properties developed by independent third-party property developers increased from approximately 0.5 million sq.m., representing approximately 0.5% of the total contracted GFA as of December 31, 2020 to approximately 1.6 million sq.m., representing approximately 1.5% of the total contracted GFA as of the Latest Practicable Date. Since December 31, 2020 and up to the Latest Practicable Date, we had been contracted to provide property management services to six residential properties and nine commercial properties developed by independent third-party property developers with the aggregate contracted GFA of 0.6 million sq.m. and 1.1 million sq.m., representing approximately 1.6% of our total contracted GFA as of the Latest Practicable Date.

We believe that, with our strong business development capabilities and market reputation as a quality property management service provider, the revenue contribution attributable to independent property owners and property developers as compared to our total revenue will continue to increase due to the increment in revenue derived from (i) independent individual property owners of the residential property projects currently under development by R&F Group which we have been engaged for providing property management services, which is expected to account for the majority of our Group’s revenue; and (ii) property developers other than R&F Group as a result of our Group’s increased efforts in participating in the selection or tender process conducted by other property developers and potential customers which are Independent Third Parties and acquisitions of property management projects.

Licenses required for operation

We hold and enjoy the benefit of all relevant licenses and qualifications necessary to carry on our current business.

Access to customers, suppliers and business partners

Our Group has a large and diversified base of customers that are unrelated to our Controlling Shareholders and/or their respective close associates. We have independent access to such customers, our suppliers as well as our other business partners.

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Operational facilities

All the properties and facilities necessary for our business operations are independent from our Controlling Shareholders and their respective close associates.

Employees

We have our own employee headcount for our operations and our own management of human resources, accounting and financing. As of the Latest Practicable Date, all of our full-time employees were recruited independently and primarily through recruitment websites, on-campus recruitment programs, recruiting firms and internal referrals.

Based on the above, our Directors are of the view that our Group has been operating independently from our Controlling Shareholders and their respective close associates during the Track Record Period and will continue to operate independently.

Financial Independence

All non-trade balances due from or due to our Controlling Shareholders and their respective close associates had been fully settled as of the Latest Practicable Date. As of the Latest Practicable Date, our Controlling Shareholders and their respective close associates had not provided any loans or any share pledge or guarantee in respect of any financing of our Group.

In addition, we have our own internal control and accounting systems, accounting and finance department, independent treasury function for cash receipts and payment and independent access to third party financing. Accordingly, our Directors are of the view that our Group is capable of maintaining financial independence from our Controlling Shareholders and their respective close associates.

CORPORATE GOVERNANCE MEASURES

Each of our Controlling Shareholders has confirmed that he/it fully comprehends his/its obligations to act in the best interests of us and our Shareholders. Our Directors believe that there are adequate corporate governance measures in place to manage existing and potential conflicts of interest. In order to further avoid potential conflicts of interest, we have implemented the following measures:

(a) as part of our preparation for the [REDACTED], we [have amended] our Articles to comply with the Listing Rules. In particular, our Articles provide that, unless otherwise provided, a Director shall not vote on any resolution approving any contract or arrangement or any other proposal in which such Director or any of his/her close associates have a material interest nor shall such Director be counted in the quorum present at the meeting;

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(b) a Director with material interests shall make full disclosure in respect of matters that may have conflict or potentially conflict with any of our interest and abstain from the board meetings on matters in which such Director or his/her close associates have a material interest, unless the attendance or participation of such Director at such meeting of the Board is specifically requested by a majority of the independent non-executive Directors;

(c) we are committed that our Board should include a balanced composition of executive, non-executive and independent non-executive Directors. We [have appointed] three independent non-executive Directors and we believe our independent non-executive Directors possess sufficient experience and they are free of any business or other relationship which could interfere in any material manner with the exercise of their independent judgement and will be able to provide an impartial, external opinion to protect the interests of our public Shareholders. Details of our independent non-executive Directors are set out in “Directors and Senior Management – Board of Directors – Independent non-executive Directors”;

(d) we have appointed Maxa Capital Limited as our compliance advisor, which will provide advice and guidance to us in respect of compliance with the applicable laws and the Listing Rules including various requirements relating to directors’ duties and corporate governance; and

(e) as required by the Listing Rules, our independent non-executive Directors shall review any connected transactions annually and confirm in our annual report that such transactions have been entered into in our ordinary and usual course of business, are either on normal commercial terms or on terms no less favorable to us than those available to or from Independent Third Parties and on terms that are fair and reasonable and in the interests of our Shareholders as a whole.

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BOARD OF DIRECTORS

Our Board currently consists of seven Directors, comprising two executive Directors, two non-executive Directors and three independent non-executive Directors. The powers and duties of our Board include convening general meetings and reporting our Board’s work at our Shareholders’ meetings, determining our business and investment plans, preparing our annual financial budgets and final reports, formulating proposals for profit distributions and exercising other powers, functions and duties as conferred by the Articles. We have entered into service agreements with each of our executive Directors. We [have also entered] into letters of appointments with each of our non-executive Directors and independent non- executive Directors.

The table below shows certain information in respect of members of our Board and senior management of our Company:

Members of our Board

Relationship with Date of Date of other Directors Existing joining our appointment Roles and and senior Name Age position(s) Group as Director responsibilities management

Ms. Wang Heng 51 Executive January 2002 March 2021 Responsible for None (王珩) Director and formulation of group chairperson of policies, overseeing the Board the business development and business strategies of our Group Mr.HuJie 46 Executive March 2021 March 2021 Responsible for the None (胡傑) Director, vice formulation of group chairperson of policies and the the Board and overall operations president and management of our Group Mr. Li Sze Lim 64 Non-executive December December Responsible for None (李思廉) Director 2020 2020 providing guidance and formulation of business strategies for the overall development of our Group Mr. Zhang Li 68 Non-executive December December Responsible for None (張力) Director 2020 2020 providing guidance and formulation of business strategies for the overall development of our Group

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Relationship with Date of Date of other Directors Existing joining our appointment Roles and and senior Name Age position(s) Group as Director responsibilities management

Mr. Zheng 63 Independent [●][●] Responsible for None Ercheng non-executive providing (鄭爾城) Director independent advice on the operations and management of our Group Mr. Zhang 63 Independent [●][●] Responsible for None Yucong non- executive providing (張宇聰) Director independent advice on the operations and management of our Group Ms. Xin Zhu 52 Independent [●][●] Responsible for None (辛珠) non-executive providing Director independent advice on the operations and management of our Group

Members of our senior management

Our senior management is responsible for the day-to-day operations and management of our business. For the biographical information of Ms. Wang Heng and Mr. Hu Jie, see “– Board of Directors – Executive Directors”. The biographical information of our other senior management members is as follows:

Date of Relationship with Date of appointment other Directors Existing joining our as senior Roles and and senior Name Age position Group management responsibilities management

Mr. Lei Daqian 45 General manager April 2017 April 2021 Responsible for the None (雷大乾) daily business operation of our Group

Mr. Chen 39 Deputy general August 2003 April 2021 Assisting the general None Changwei manager manager in the daily (陳常偉) business operation of our Group

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Date of Relationship with Date of appointment other Directors Existing joining our as senior Roles and and senior Name Age position Group management responsibilities management

Ms. Ma Yanlin 52 Financial July 2015 April 2021 Responsible for the None (馬岩琳) controller financial management of our Group

Executive Directors

Ms. Wang Heng (王珩), aged 51, was appointed as our executive Director and chairperson of our Board on March 30, 2021. Ms. Wang joined our Group in January 2002 as a supervisor in Tianli Property and became a director of Tianli Property in December 2006 and has been responsible for formulation of group policies, overseeing the business development and business of our Group.

Since April 1995, Ms. Wang has held various positions in R&F Properties, such as manager of human resources and administration department, director of human resources and administration department and secretary of the board of R&F Properties, deputy general manager, with her current position as the vice president. She is also a director of certain subsidiaries of R&F Properties.

Ms. Wang obtained a bachelor’s degree in engineering from Shanghai Jiao Tong University (上海交通大學) in the PRC in July 1992.

Mr.HuJie(胡傑), aged 46, was appointed as our executive Director, vice chairperson of our Board and president on March 30, 2021. Mr. Hu joined our Group in March 2021 and has been responsible for formulation of group policies and the overall operations and management of our Group.

From July 2000 to June 2001, Mr. Hu worked as senior manager in China Southern Securities Co., Ltd. (中國南方證券有限公司), an investment bank, where he was primarily responsible for investment bank business. Prior to joining R&F Properties, Mr. Hu worked as deputy general manager of the investment banking department in the Shenzhen headquarter of Ping An Securities Limited (平安證券股份有限公司), an investment bank, where he was primarily responsible for investment bank business. From January 2002 to June 2007, he worked as a manager of investment department of R&F Properties, in charge of company restructuring, listing and major investment as well as financing. Since June 2007, he has been appointed as secretary of the board of the R&F Properties. In February 2019, he was appointed as deputy general manager of the R&F Properties.

Since October 2018, Mr. Hu has been an independent non-executive director of Mobvista Inc. (匯量科技有限公司), a technology platform providing mobile advertising and mobile analytics services, whose shares are listed on Main Board of the Stock Exchange (stock code: 1860).

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Mr. Hu obtained a master’s degree in finance from Jinan University (暨南大學)inthe PRC in June 2000.

Non-executive Directors

Mr. Li Sze Lim (李思廉), aged 64, was re-designated as our non-executive Director on March 30, 2021 and is responsible for providing guidance and formulation of business strategies for the overall development of our Group.

Mr. Li founded R&F Properties with Mr. Zhang Li in August 1994. Mr. Li is the chairman, an executive director, a member of the remuneration committee and the chairman of the nomination committee of the R&F Properties. He is responsible for the strategic direction of the R&F Properties and also specially responsible for the sales and financial management function. Mr. Li is also a director of certain subsidiaries of the R&F Properties.

Mr. Li obtained a bachelor’s degree of science from the Chinese University of Hong Kong in November 1978 and was awarded a degree of Doctor of Business (Honoris Causa) by Macquarie University in Australia in April 2018. Mr. Li is the chairman of the Council of Guangdong Chamber of Real Estate (廣東省地產商會), the director of China Real Estate Developers and Investors Association (中華房地產投資開發商會), the chairman of the Fourth Council of Guangzhou Real Estate Chamber of Commerce (廣東省地產商會第四屆理事會), a member of the Twelfth Executive Committee of the All-China Federation of Industry and Commerce (中華全國工商業聯合會), a vice chairman of All-China General Chamber of Industry and Commerce (中華全國工商業聯合會), the president and the chairman of the supervisory board of New Home Association (新家園協會) and a director of Jinan University (暨南大學). Mr. Li was awarded a Silver Bauhinia Star from the Hong Kong Special Administrative Region on July 1, 2019.

Mr. Zhang Li (張力), aged 68, was re-designated as our non-executive Director on March 30, 2021 and is responsible for providing guidance and formulation of business strategies for the overall development of our Group.

In August 1994, Mr. Zhang and Mr. Li together founded R&F Properties. Mr. Zhang is the co-chairman, an executive director and chief executive officer of R&F Properties. He has been mainly responsible for land acquisition, construction development, cost control and managing daily operations. Mr. Zhang is also a director of certain subsidiaries of the R&F Properties.

Mr. Zhang is also chairman and executive director of Kinetic Mines and Energy Limited (力量礦業能源有限公司)(“Kinetic Mines”), whose shares are listed on the Main Board of the Stock Exchange (stock code: 1277). Mr. Zhang is a member of the 11th, 12th and 13th National Committee of the Chinese People’s Political Consultative Conference, the president of China Real Estate Chamber of Commerce and a director and part-time professor of Jinan University.

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Independent non-executive Directors

Mr. Zheng Ercheng (鄭爾城), aged 63, was appointed as our independent non-executive Director on [●] and is responsible for providing independent advice on the operations and managements of our Group.

Mr. Zheng has extensive experience in the China banking industry and financial sector. Mr. Zheng was sub-branch deputy governor and then governor of China Construction Bank (中國建設銀行), Guangzhou Branch, Tianhe Sub-branch from 1987 to 1997 and general manager of the international business department of the Guangzhou Branch of China Construction Bank (中國建設銀行) from 1997 to 1999. He was the general manager of the Guangzhou Branch of Cinda Asset Management Company (信達資產管理公司) from 1999 to 2000. Mr. Zheng was a supervisor of R&F Properties from June 2004 to May 2014. He has also been an independent non-executive director of R&F Properties and Kinetic Mines since May 2014 and March 2015, respectively.

Mr. Zheng graduated from Guangdong Amateur University of Science and Technology (廣東省業餘科技大學) (currently known as Guangdong Engineering Vocational and Technical College (廣東工程職業技術學院)) with a diploma in industrial and civil architecture in the PRC in July 1986.

Mr. Zhang Yucong (張宇聰), aged 63, was appointed as our independent non-executive Director on [●] 2021 and is responsible for providing independent advice on the operations and managements of our Group.

Mr. Zhang has over 30 years of experience in financing management. Prior to November 2001, Mr. Zhang consecutively worked in China Construction Bank (中國建設銀行) with his last position as the deputy director in Guangzhou branch of China Construction Bank (中國建設銀行) and Guangzhou office of China Cinda Asset Management Co., Ltd. (中國信達資產管理股份有限公司) as the deputy director, where he was primarily responsible for the overall management. From November 2001 to March 2004, he worked as deputy general manager in R&F Properties, a vice chairman in Beijing Fulicheng Real Estate Development Co.,Ltd.(北京富力城房地產開發有限公司) and a vice chairman in Fuli (Beijing) Real Estate Development Co., Ltd. (富力(北京)地產開發有限公司), where he was primarily responsible for the overall management of above companies. From June 2004 to August 2010, he worked as the chairman in Guangzhou Fuxing Investment Co., Ltd. (廣州市富興投資有限公司) and a general manager in Guangzhou Yinxiang Guarantee Co., Ltd. (廣州市銀翔擔保有限公司), where he was primarily responsible for the overall management of such companies. From August 2010 to August 2014, he worked as a deputy general manager in Cinda Real Estate Co., Ltd. (信達地產股份有限公司), a real estate company whose shares are listed in the Shanghai Stock Exchange (stock code: 600657). From June 2014 to April 2016, he worked as a deputy general manager in Cinda Real Estate Co., Ltd. (信達地產股份有限公司), an executive director in Guangzhou Cinda Property Investment Co., Ltd. (廣州信達置業投資有限公司)andan executive director in Shenzhen Cinda Real Estate Co., Ltd. (深圳信達置業有限公司), where he was primarily responsible for the overall management of such companies.

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Mr. Zhang obtained a vocational college’s degree in industrial accounting from Guangzhou Amateur Finance College (廣州業餘大學) in the PRC in October 1984. He was conferred as a senior economist (高級經濟師) by China Construction Bank (中國建設銀行)in December 1997.

Ms. Xin Zhu (辛珠), aged 52, was appointed as our independent non-executive Director on [●] and is responsible for providing independent advice on the operations and managements of our Group.

Ms. Xin has over 15 years of experience in the accounting industry as well as executive management in public companies. From February 2005 to December 2005, Ms. Xin worked at Guangdong Holdings Limited (廣東粵海控股集團有限公司), a company engaged in infrastructure development, manufacturing and real estate, where she last served as a deputy general manager of finance department of the group and financial controller of its subsidiary, Shenzhen Kingway Brewery Holdings Limited (深圳金威啤酒集團有限公司), where she was responsible for the financial management of the group and ERP Informationization Construction. From February 2006 to July 2008, she worked in Hopson Development Holdings Limited (合生創展集團有限公司), whose shares are listed on the Main Board of the Stock Exchange (stock code: 754), a property developer, where she last served as a group accounting controller, and was primarily responsible for financial management, financing and fund management. From September 2009 to September 2013, she worked in China Aoyuan Group Limited (中國奧園集團股份有限公司) (previously known as China Aoyuan Property Group Limited (中國奧園地產集團股份有限公司)), whose shares are listed on the Main Board of the Stock Exchange (stock code: 3883), a property developer, with her last concurrent positions held as an executive director and executive vice president, and was primarily responsible for financial management, fund management and internal auditing. She was also involved in review, discussion and decisions making of land acquisition when she worked at China Aoyuan Group Limited. From July 2014 to March 2015, she served as the chief financial officer of Logan Property Holdings Company Limited (龍光地產控股有限公司), whose shares are listed on the Main Board of the Stock Exchange (stock code: 3380), where she was primarily responsible for financing.

Since June 2018, Ms. Xin has been an independent non-executive director of CanSino Biologics Inc. (康希諾生物股份公司), whose shares are listed on the Main Board of the Stock Exchange (stock code: 6185), a company engaging in the research and development, manufacturing and sales of vaccines. Since April 2020, she has been an independent non-executive director of Central China New Life Limited (建業新生活有限公司), whose shares are listed on the Main Board of the Stock Exchange (stock code: 9983), a property management service provider. Since November 2020, she has been an independent non- executive director of Datang Group Holdings Limited (大唐集團控股有限公司), whose shares are listed on the Main Board of the Stock Exchange (stock code: 2117), a property development company.

Ms. Xin obtained a bachelor’s degree in accounting from Renmin University of China (中國人民大學) in the PRC in July 1990 and a master’s degree in business administration from Auckland Institute of Studies in New Zealand in December 1999. Ms. Xin became a member of the Chinese Institute of Certified Public Accountant of the PRC in January 1996 and a member of the CPA Australia in January 2010.

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Save as disclosed above, none of our Directors have held any other directorships in listed companies during the three years immediately preceding the date of this Document.

Save as disclosed above, to the best of the knowledge, information and belief of our Directors having made all reasonable enquiries, there was no information relating to our Directors that is required to be disclosed pursuant to paragraphs (b) to (v) or Rule 13.51(2) of the Listing Rules or any other matters concerning any Director that needs to be brought to the attention of our Shareholders as of the Latest Practicable Date.

SENIOR MANAGEMENT

Mr. Lei Daqian (雷大乾), aged 45, joined our Group as deputy general manager in Tianli Property in April 2017 and was promoted to general manager of Tianli Property in March 2020. He was appointed as our general manager in April 2021 and is primarily responsible for the daily business operation of our Group.

From March 2002 to April 2015, he worked as a director and the responsible person of the representative office (Xinjiang) in the Urumqi branch of Chengdu Vanke Property Service Co.,Ltd.(成都萬科物業服務有限公司), a property management company, where he was primarily responsible for the overall property management. From May 2015 to March 2017, he worked as the vice general manager of central China region and quality director in China Resources (Wuhan) Property Co., Ltd. (華潤置地(武漢)物業有限公司), where he was primarily responsible for the business management and marketing of such company.

Mr. Lei obtained a college’s degree in law from Sichuan University (四川大學)inthe PRC in December 2012.

Mr. Chen Changwei (陳常偉), aged 39, joined our Group in August 2003 and had been worked in Guangzhou branch, Chongqing branch and South China region in Tianli Property, where he was primarily responsible for the overall management of such branches and region. Mr. Chen was promoted to the executive deputy general manager of Tianli Property in March 2020. He was appointed as our deputy general manager in April 2021 and is primarily responsible for assisting the general manager in the daily business operations of our Group.

Mr. Chen graduated from Private Peizheng Commercial College (民辦培正商學院) (currently known as Guang Dong Peizheng College (廣東培正學院)) with a diploma in property management and marketing (minor) in the PRC in June 2003. Mr. Chen obtained a bachelor’s degree in marketing in South China University of Technology (華南理工大學)inthe PRC in January 2008. He also obtained an EMBA degree in Chongqing University of Technology (重慶理工大學) in the PRC in July 2015.

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Ms. Ma Yanlin (馬岩琳), aged 52, joined our Group as the financial controller of Tianli Property in July 2015. She was appointed as our financial controller in April 2021 and is primarily responsible for the financial management of our Group.

From August 1990 to August 1994, Ms. Ma worked in Nanjing Yangzi Petroleum Transportation Co., Ltd. (南京揚子石化運輸有限責任公司) (currently known as (Nanjing Yangzi Logistics Co., Ltd. (南京揚子物流有限責任公司)), a petroleum company, where she was primarily responsible for the accounting. From May 1997 to May 1998, she worked in Shenzhen Bailixin Property Development Co., Ltd. (深圳市百利鑫房地產開發有限公司), a property development company, where she was primarily responsible for the finance and tax management. From January 2000 to October 2004, she worked as an accountant in Guangzhou branch of Hua Xia Bank Co., Ltd. (華夏銀行股份有限公司), a state-owned bank whose shares are listed in the Shanghai Stock Exchange (stock code: 600015), where she was primarily responsible for the finance management and corporate credit investigation. From November 2004 to May 2006, she worked as a chief financial officer in Guangzhou Huanan Food Trade Center (廣州華南糧食交易中心), an online food trade center, where she was primarily responsible for the capital management and supervision. From April 2007 to July 2015, she worked as a financial manager in R&F Properties, where she was primarily responsible for the financial management of the hotel projects in R&F Properties.

Ms. Ma obtained a bachelor’s degree in industrial management and engineering from China Agricultural University (中國農業大學) (formerly known as Beijing Agricultural Engineering University (北京農業工程大學)) in the PRC in July 1990. She also obtained a master’s degree in corporate management from Sun Yat Sen University (中山大學) in the PRC in June 1997.

JOINT COMPANY SECRETARIES

Mr. Li Wenchang (李文昌) was appointed as our joint company secretary on March 30, 2021.

Since July 2006, Mr. Li Wenchang has held various positions in R&F Properties, including investment manager, human resource manager and with his current position as the general manager of capital operation center and securities representative, where he has been primarily responsible for the capital management and investment.

Mr. Li Wenchang obtained a bachelor’s degree in administrative management from South China University of Technology (華南理工大學) in the PRC in July 2006. He also obtained an EMBA degree from South China University of Technology (華南理工大學) in the PRC in December 2020. Mr. Li Wenchang obtained the certificate of qualification for secretary of the board granted by the Shanghai Stock Exchange (上海證券交易所) in September 2015.

Ms. Mak Po Man Cherie (麥寶文) was appointed as our joint company secretary on March 30, 2021.

Ms. Mak Po Man Cherie is the vice president of SWCS Corporate Services Group (Hong Kong) Limited. She has worked for various professional firms and listed companies in Hong Kong, with over 15 years of experience in the fields of auditing, accounting, corporate finance,

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Ms. Mak obtained a master of corporate governance degree from the Hong Kong Polytechnic University in 2017. She has been admitted as an associate member of The Hong Kong Institute of Chartered Secretaries and The Institute of Chartered Secretaries and Administrators in the United Kingdom in 2017, a member of the Hong Kong Institute of Certified Public Accountants in 2003, and a fellow member of the Association of Chartered Certified Accountants in 2006.

BOARD COMMITTEES

Our Board has established the Audit Committee, the Remuneration Committee and the Nomination Committee and delegated various responsibilities to these committees, which assist our Board in discharging its duties and overseeing particular aspects of our Group’s activities.

Audit Committee

Our Group has established the Audit Committee on [●], 2021 with written terms of reference in compliance with Rule 3.21 of the Listing Rules and paragraph C.3 of the Corporate Governance Code (the “CG Code”) as set out in Appendix 14 to the Listing Rules. The Audit Committee consists of three members, namely, Mr. Li Sze Lim, Ms. Xin Zhu and Mr. Zheng Ercheng, all of whom are our independent non-executive Directors. Ms. Xin Zhu is the chairlady of the Audit Committee and is our independent non-executive Director with the appropriate professional qualifications.

The primary duties of the Audit Committee include, but not limited to (i) reviewing and supervising our financial reporting process and internal control system of our Group, risk management and internal audit; (ii) providing advice and comments to our Board; and (ii) performing other duties and responsibilities as may be assigned by our Board.

Remuneration Committee

Our Group has established the Remuneration Committee on [●], 2021 with written terms of reference in compliance with Rule 3.25 of the Listing Rules and paragraph B.1 of the CG Code as set out in Appendix 14 to the Listing Rules. The Remuneration Committee consists of three members, namely, Mr. Li Sze Lim, Mr. Zheng Ercheng and Mr. Zhang Yucong. Mr. Zheng Ercheng is the chairman of the Remuneration Committee.

The primary duties of the Remuneration Committee include, but not limited to (i) establishing, reviewing and providing advices to our Board on our and structure concerning remuneration of our Directors and senior management and on the establishment of a formal and transparent procedure for developing policies concerning such remuneration; (ii) determining

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Nomination Committee

Our Group has also established the Nomination Committee on [●], 2021 with written terms of reference in compliance with paragraph A.5 of the CG Code as set out in Appendix 14 to the Listing Rules. The Nomination Committee consists of three members, namely Ms. Wang Heng, Mr. Zheng Ercheng and Mr. Zhang Yucong. Ms. Wang Heng is the chairlady of the Nomination Committee.

The primary duties of the Nomination Committee include, but not limited to (i) review the structure, size and composition of our Board on a regular basis and make recommendations to the Board regarding any proposed changes to the composition of our Board; (ii) identify, select or make recommendations to our Board on the selection of individuals nominated for directorship, and ensure the diversity of our Board members; (iii) assess the independence of our independent non-executive Directors; and (iv) make recommendations to our Board on relevant matters relating to the appointment, re-appointment and removal of our Directors and succession planning for our Directors.

CORPORATE GOVERNANCE

Our Company recognizes the importance of incorporating elements of good corporate governance in the management structures and internal control procedures of our Group so as to achieve effective accountability.

Our Company has adopted the code provisions stated in the CG Code.

Our Company is committed to the view that our Board should include a balanced composition of executive Directors and independent non-executive Directors so that there is a strong independent element on the Board, which can effectively exercise independent judgment.

BOARD DIVERSITY POLICY

Our Board has adopted a board diversity policy which sets out the approach to achieve diversity on our Board. Our Company recognizes and embraces the benefits of having a diverse Board and sees increasing diversity at the Board level as an essential element in supporting the attainment of our Company’s strategic objectives and sustainable development. Our Company seeks to achieve Board diversity through the consideration of a number of factors, including but not limited to gender, age, cultural and educational background, ethnicity, professional experience, skills, knowledge and length of service. All Board appointments will be based on meritocracy and candidates will be considered against objective criteria, having due regard to the benefits of diversity on our Board.

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Our Board currently consists of seven members, including one female executive Director and one female independent non-executive Director. Our Directors also have a balanced mix of knowledge, skills and experience, including property management, overall business management, finance, accounting, and investment. They have obtained tertiary degrees in various majors including business administration, accounting, science, financing and engineering. We have three independent non-executive Directors who have different industry backgrounds, representing over one-third of our Board members. We have taken and will continue to take steps to promote gender diversity at all levels of our Company, including without limitation at our Board and senior management levels. Taking into account our business model and specific needs as well as the presence of two female Directors out of a total of seven Board members, we consider that the composition of our Board satisfies our board diversity policy.

Our nomination committee is responsible for ensuring the diversity of our Board members. After [REDACTED], our nomination committee will review our board diversity policy from time to time to ensure its continued effectiveness and we will disclose the implementation of our board diversity policy in our corporate governance report on an annual basis.

COMPENSATION OF DIRECTORS AND SENIOR MANAGEMENT

Our Directors and members of our senior management receive compensation from our Group in the form of salaries, bonuses and other benefits in kind such as contributions to pension plans. The aggregate remuneration (including fees, salaries, allowances and benefits in kind, performance-related bonuses, pension scheme contributions and social welfare) paid to our Directors for the three years ended December 31, 2020 was nil. Save as disclosed above, no other amounts have been paid or are payable by any member of our Group to our Directors for the three years ended December 31, 2020.

The aggregate amount of salaries, allowances and benefits in kind, performance-related bonuses, pension scheme contributions and social welfare paid to our five highest paid employees who are neither a director nor chief executive of the Company for the three years ended December 31, 2020 was approximately RMB7.3 million, RMB7.6 million, and RMB7.3 million, respectively.

No remuneration was paid by us to our Directors or the five highest paid individuals as an inducement to join or upon joining us or as a compensation for loss of office for the three years ended December 31, 2020. Further, none of our Directors had waived or agreed to waive any remuneration during the same periods.

Under the arrangement currently in force, the aggregate remuneration (including fees, salaries, contributions to pension schemes, bonus, share-based payments, retirement benefits scheme, allowances and other benefits in kind) of our Directors for the year ending December 31, 2021 is estimated to be no more than approximately RMB100 million.

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Our Board will review and determine the remuneration and compensation packages of our Directors and senior management and will, following the [REDACTED], receive recommendation from the Remuneration Committee which will take into account salaries paid by comparable companies, time commitment and responsibilities of our Directors and performance of our Group.

SHARE OPTION SCHEME

Our Company has conditionally adopted the Share Option Scheme on [●]. For details of the Share Option Scheme, see “Statutory and General Information – D. Other Information – 1. Share Option Scheme” in Appendix IV to this Document.

COMPLIANCE ADVISOR

In compliance with Rule 3A.19 of the Listing Rules, we have appointed Maxa Capital Limited as our compliance advisor to provide advisory services to our Company. It is expected that the compliance advisor will, amongst other things, advise our Company with due care and skill in the following circumstances:

• before the publication of any regulatory announcement, circular or financial report;

• where a transaction, which might be a notifiable or connected transaction, is contemplated, including shares issues and share buybacks;

• where we propose to use the proceeds from the [REDACTED] in a manner different from that detailed in this Document or where our business activities, developments or results deviate from any forecast, estimate, or other information in this Document; and

• where the Stock Exchange makes an inquiry of us regarding unusual movements in the price or trading volume of our Shares.

The term of the appointment shall commence on the [REDACTED] and end on the date on which we distribute our annual report in respect of our financial results for the first full financial year commencing after the [REDACTED] and such appointment may be subject to extension by mutual agreement.

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The following is a description of the authorized and issued share capital of our Company in issue and to be issued as fully paid or credited as fully paid immediately before and following the completion of the Capitalization Issue and the [REDACTED] (without taking into account any Shares which may be issued pursuant to the exercise of the [REDACTED] or any options that may be granted under the Share Option Scheme):

Nominal value (HK$)

Authorized share capital:

[5,000,000,000] Shares of HK$0.01 each [50,000,000]

Issued and to be issued, fully paid or credited as fully paid:

100,000 Shares in issue as of the date of this Document 1,000

[REDACTED] Shares to be issued pursuant to the Capitalization Issue [REDACTED]

[REDACTED] Shares to be issued under the [REDACTED][REDACTED]

[REDACTED] Total [REDACTED]

ASSUMPTIONS

The above table assumes that the [REDACTED] becomes unconditional and the issue of Shares pursuant to the Capitalization Issue and the [REDACTED] are made. It takes no account of any Shares which may be issued pursuant to the exercise of the [REDACTED]or any options that may be granted under the Share Option Scheme or any Shares which may be issued or brought back by us pursuant to the general mandates granted to our Directors to issue or buy back Shares as described below.

RANKINGS

The [REDACTED] will be ordinary shares in the share capital of our Company and will carry the same rights in all respects with all Shares in issue or to be issued as mentioned in this Document and, in particular, will rank in full for all dividends or other distributions declared, made or paid on the Shares in respect of a record date which falls after the date of this Document save for the entitlement under the Capitalization Issue.

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SHARE OPTION SCHEME

Our Company has conditionally adopted the Share Option Scheme. The principal terms of the Share Option Scheme are summarized in “Statutory and General Information – D. Other Information – 1. Share Option Scheme” in Appendix IV to this Document.

GENERAL MANDATE TO ALLOT AND ISSUE NEW SHARES

Subject to the [REDACTED] becoming unconditional, our Directors have been granted a general mandate to allot, issue and deal with Shares in the share capital of our Company with a total number of issued shares of not more than the sum of:

(1) [REDACTED]% of the total number of Shares in issue immediately following the completion of the Capitalization Issue and the [REDACTED] (without taking into account any Shares which may be issued pursuant to the exercise of the [REDACTED] or any options that may be granted under the Share Option Scheme); and

(2) the total number of Shares bought back by our Company (if any) pursuant to the general mandate to buy back Shares granted to our Directors referred to below.

Our Directors may, in addition to the Shares which they are authorized to issue under this general mandate, allot, issue or deal with Shares under a rights issue, scrip dividend scheme or similar arrangement.

This general mandate will remain in effect until the earliest of:

(i) the conclusion of the next annual general meeting of our Company;

(ii) the expiration of the period within the next annual general meeting of our Company is required by the Articles or any applicable laws to be held; or

(iii) the date on which such general mandate is varied or revoked by an ordinary resolution of our Shareholders in general meeting.

Further information on this general mandate is set out in “Statutory and General Information – A. Further Information about our Company – 3. Written resolutions of our Shareholders passed on [●], 2021” in Appendix IV to this Document.

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GENERAL MANDATE TO BUY BACK SHARES

Subject to the [REDACTED] becoming unconditional, our Directors have been granted a general mandate to exercise all the powers of our Company to buy back Shares with a total number of Shares of not more than 10% of the total number of Shares in issue immediately following the completion of the Capitalization Issue and the [REDACTED] (without taking into account any Shares which may be issued pursuant to the exercise of the [REDACTED] Option or any options that may be granted under the Share Option Scheme).

This mandate only relates to buybacks made on the Stock Exchange or any other stock exchange on which the Shares are [REDACTED] (and which is recognized by the SFC and the Stock Exchange for this purpose), and which are in accordance with the Listing Rules. A summary of the relevant Listing Rules is set out in “Statutory and General Information – A. Further Information about our Company – 6. Repurchase of our Shares” in Appendix IV to this Document.

This general mandate will remain in effect until the earliest of:

(i) the conclusion of the next annual general meeting of our Company;

(ii) the expiration of the period within the next annual general meeting of our Company is required by the Articles or any applicable laws to be held; or

(iii) the date on which such general mandate is varied or revoked by an ordinary resolution of our Shareholders in general meeting.

CIRCUMSTANCES UNDER WHICH GENERAL MEETING AND CLASS MEETING ARE REQUIRED

Our Company has only one class of shares, namely ordinary shares, each of which carries the same rights as the other shares.

As a matter of the Cayman Islands Companies Act, an exempted company is not required by law to hold any general meeting or class meeting. The holding of general meeting or class meeting is prescribed under the articles of association of a company. Accordingly, our Company will hold general meetings as prescribed under the Articles, a summary of which is set out in “Summary of the Constitution of the Company and Cayman Islands Company Law” in Appendix III to this Document.

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So far as our Directors are aware, the following persons will, immediately prior to and following the completion of the Capitalization Issue and the [REDACTED] (without taking into account any Shares which may be issued pursuant to the exercise of the [REDACTED] or any options that may be granted under the Share Option Scheme), have interests or short positions in our Shares or underlying Shares which would be required to be disclosed to us under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who is, directly or indirectly, interested in 10% or more of the issued voting shares of any other member of our Company:

Shares held as of the date of this Document and immediately prior to the Shares held immediately completion of the following the completion of Name of Nature of Capitalization Issue and the the Capitalization Issue and Shareholder Interest [REDACTED](1) the [REDACTED](1) Approximate Approximate Number Percentage Number Percentage

Mr. Li(2)(3)(4) Interest in 46,477 46.48% [REDACTED] [REDACTED]% controlled Shares (L) Shares (L) corporation Prime Elegance(2) Beneficial Owner 40,000 40.00% [REDACTED] [REDACTED]% Shares (L) Shares (L) Mr. Zhang(5)(6)(7) Interest in 46,477 46.48% [REDACTED] [REDACTED]% controlled Shares (L) Shares (L) corporation Sun Arise(5) Beneficial Owner 40,000 40.00% [REDACTED] [REDACTED]% Shares (L) Shares (L) Smart Up(8) Beneficial Owner 7,046 7.05% [REDACTED] [REDACTED]% Shares (L) Shares (L) Mr. Chen Sze Lok Interest in 7,046 7.05% [REDACTED] [REDACTED]% controlled Shares (L) Shares (L) corporation

Notes:

(1) The letter “L” denotes the person’s long position in our Shares.

(2) Prime Elegance is directly wholly owned by Mr. Li.

(3) Virtuous Charm is expected to hold [REDACTED] and [REDACTED] Shares, representing approximately [REDACTED]% and [REDACTED]% of our Shares in issue immediately prior to and following the completion of the Capitalization Issue and [REDACTED] (without taking into account any Shares which may be issued pursuant to the exercise of the [REDACTED]). Virtuous Charm is wholly owned by Mr. Li.

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(4) Jade Concord is expected to hold [REDACTED] and [REDACTED] Shares, representing approximately [REDACTED]% and [REDACTED]% of our Shares in issue immediately prior to and following the completion of the Capitalization Issue and [REDACTED] (without taking into account any Shares which may be issued pursuant to the exercise of the [REDACTED]). Jade Concord is wholly owned by Mr. Li.

(5) Sun Arise is directly wholly owned by Mr. Zhang.

(6) Active Strength is expected to hold [REDACTED] and [REDACTED] Shares, representing approximately [REDACTED]% and [REDACTED]% of our Shares in issue immediately prior to and following the completion of the Capitalization Issue and [REDACTED] (without taking into account any Shares which may be issued pursuant to the exercise of the [REDACTED]). Active Strength is wholly owned by Mr. Zhang.

(7) Grand Favour is expected to hold [REDACTED] and [REDACTED] Shares, representing approximately [REDACTED]% and [REDACTED]% of our Shares in issue immediately prior to and following the completion of the Capitalization Issue and [REDACTED] (without taking into account any Shares which may be issued pursuant to the exercise of the [REDACTED]). Grand Favour is wholly owned by Mr. Zhang.

(8) Smart Up is directly wholly owned by Mr. Chen Sze Lok.

Save as disclosed above, our Directors are not aware of any person who will, immediately following the completion of the Capitalization Issue and the [REDACTED] (assuming that the [REDACTED] is not exercised), have beneficial interests or short positions in any Shares or underlying Shares, which would be required to be disclosed to us and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who is, directly or indirectly interested in 10% or more of the issued voting shares of any member of our Group. Our Directors are not aware of any arrangement which may at a subsequent date result in a change of control of our Company.

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You should read the following discussion and analysis in conjunction with our audited combined financial information set forth in our Accountant’s Report in Appendix I to this Document. Our audited combined financial information has been prepared in accordance with the Hong Kong Financial Reporting Standards (“HKFRS”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”), which may differ in material aspects from generally accepted accounting principles in other jurisdictions.

The following discussion and analysis and other parts of this Document contain certain forward-looking statements which involve risks and uncertainties. These forward-looking statements are based on assumptions and analysis we made in light of our experience and perception of historical events, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the sections headed “Risk Factors,” “Forward-looking Statements” and elsewhere in this Document.

OVERVIEW

We are a leading comprehensive property management service provider in the PRC, offering a wide range of high-quality property management services and commercial property operation services. According to CIA, we were ranked 11th among the 2021 Top 100 Property Management Companies in China in terms of overall strength, based on data from the previous year on key factors such as management scale, operational performance, service quality, growth potential and social responsibility.

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BASIS OF PRESENTATION AND PREPARATION

Immediately prior to and after the Reorganization, our residential property management services and commercial property management services (the “[REDACTED] Businesses”) are conducted through Guangzhou Tianli Property Management Co., Ltd. and its subsidiaries, Datong Hengfu Property Management Co., Ltd. and Tianjin Huaxin Property Management Co., Ltd. (collectively, the “Operating Entities”). Pursuant to the Reorganization, the [REDACTED] Businesses are transferred to and held by an indirectly wholly owned subsidiary of the Company. The Company has not been involved in any other business prior to the Reorganization and do not meet the definition of a business. The Reorganization steps are merely a reorganization of the [REDACTED] Businesses and did not change the business substance and management of the [REDACTED] Businesses conducted through the Operating Entities.

Accordingly, the Group resulting from the Reorganization is regarded as a continuation of the [REDACTED] Businesses and, for the purpose of this Document, the historic financial information has been prepared and presented as a continuation of the combined financial statements of the Operating Entities, with the assets and liabilities of the Group recognized and measured at the carrying amounts of the [REDACTED] Businesses as recorded in the combined financial statements of the Operating Entities for all periods presented.

Our Group has adopted HKFRS 9, HKFRS 15 and HKFRS 16 using the full retrospective approach with which the relevant accounting policies have been consistently applied to our Group’s combined financial statements throughout the Track Record Period.

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KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business, results of operations and financial condition have been and will continue to be affected by a number of factors, including those set out in “Risk Factors” in this Document and those discussed below:

GFA under Our Management

During the Track Record Period, we generated a significant portion of our revenue from our basic property management services, which amounted to RMB1,360.6 million, RMB1,559.7 million, and RMB1,782.4 million, respectively, for 2018, 2019 and 2020, accounting for 74.5%, 71.9%, and 68.6%, respectively, of our total revenue for the same years. Since the amount of revenue generated from our basic property management services largely depends on the total GFA of properties under our management, our ability to secure new property management service agreements and renew existing property management service agreements becomes a crucial factor to our business, results of operations and financial condition.

During the Track Record Period, we experienced a steady growth in the total GFA under our management, which amounted to 49.0 million sq.m., 57.6 million sq.m., and 69.4 million sq.m., respectively, as of December 31, 2018, 2019 and 2020. However, we cannot assure you that we can secure new residential property management service agreements or renew our existing residential property management service agreements on favorable terms, or at all in the future. If the growth in the aggregate GFA under our management fails to meet our expectation, our business, results of operations and financial condition might be negatively impacted.

Source of Revenue

During the Track Record Period, a majority of our revenue was derived from residential property management services and commercial property management services provided to projects developed by R&F Group. In 2018, 2019 and 2020, our revenue generated from property management services provided to projects developed by R&F Group amounted to RMB1,323.6 million, RMB1,509.3 million, and RMB1,715.0 million, respectively, accounting for approximately 72.6%, 69.5%, and 66.0%, respectively, of our total revenue for the same years. Therefore, any adverse development in the business or financial positions of R&F Group or their ability to develop and maintain properties may materially and adversely affect our ability to procure new property management services from them, negatively impacting our overall results of operations and financial condition.

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Service Mix

As the profit margins of our different business lines vary, changes in revenue contributed by each business line affect our results of operations. The following table sets forth a breakdown of our gross profit and gross profit margin by business line during the years indicated.

Year ended December 31, 2018 2019 2020 Gross Gross Gross Gross Profit Gross Profit Gross Profit Profit Margin Profit Margin Profit Margin RMB’000 % RMB’000 % RMB’000 %

Residential property management services ...... 80,513 7.4 164,143 11.8 371,839 21.2 – Basic property management services to residential properties ...... 32,221 4.2 71,548 7.6 156,477 13.9 – Value-added services to non- property owners . . 29,063 11.8 63,419 17.6 174,068 32.2 – Community value- added services . . . 19,229 26.6 29,176 32.4 41,294 44.5 Commercial property management services ...... 190,750 26.1 225,217 28.8 272,330 32.4 – Basic property management services to commercial properties ...... 133,417 22.7 154,958 25.0 181,446 27.6 – Commercial operational and value-added services ...... 57,333 40.0 70,259 43.8 90,884 50.0

Total...... 271,263 14.9 389,360 17.9 644,169 24.8

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In general, the gross profit margin for our commercial property management services tends to be higher than that of our residential property management services, because customers generally have higher and more customized demands for commercial property management services, and as a result we are able to charge higher prices for our provision of commercial property management services. We expect that the gross profit margin of commercial property management services will remain higher. Leveraging our experience and expertise, we plan to devote more resources to grow our commercial property management services.

Pricing Ability

Our service pricing level directly affects our results of operations and financial condition. During the Track Record Period, we generated all of our revenue from our property management services on a lump sum basis. On a lump sum basis, we charge property management fees at a pre-determined fixed lump sum price per sq.m., representing “all-inclusive” fees for the property management services we provide. Therefore, our ability to raise our property management fees has an important impact on our results of operation and financial condition. In 2018, 2019 and 2020, our average residential property management remained stable at RMB2.42 per sq.m. per month, RMB2.42 per sq.m. per month and RMB2.41 per sq.m. per month, and average commercial property management was RMB9.77 per sq.m. per month, RMB10.01 per sq.m. per month and RMB10.08 per sq.m. per month.

To illustrate how property management fees affect our results of operations, the following table sets forth a sensitivity analysis of how our profit for the year and revenue generated from property management services would fluctuate in response to decreases in average property management fees during the Track Record Period.

Year ended December 31, 2018 2019 2020 RMB’000

(Loss)/profit for the year ...... (11,640) 63,830 239,751 Total Revenue ...... 1,823,448 2,170,101 2,597,422 Assuming 5% decrease in our average basic property management fees Impact on total revenue ...... (68,029) (77,984) (89,120) Impact on (loss)/profit for the year(1) . . (51,022) (58,488) (66,840) Assuming 10% decrease in our average basic property management fees Impact on total revenue ...... (136,058) (155,969) (178,241) Impact on (loss)/profit for the year(1) . . . (102,043) (116,977) (133,681)

Note:

(1) Impact on profit and total comprehensive income for the year was calculated under the assumption that EIT was 25.0% for the year.

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Ability to Mitigate the Impact of Rising Labor Costs

Since property management is labor intensive and labor costs constitute a substantial portion of our cost of sales, our ability to manage labor costs affects our results of operations and financial condition. During the Track Record Period, our labor costs represented the largest component of our cost of sales, and experienced steady increases. In 2018, 2019 and 2020, our labor costs amounted to RMB1,098.6 million, RMB1,267.0 million, and RMB1,300.4 million, respectively, which accounted for 70.8%, 71.2%, and 66.6%, respectively, of our total cost of sales. The increases in labor costs during the Track Record Period were primarily due to the expansion of our business as demonstrated by the increases in (i) the aggregate GFA under our management; and (ii) average market salary.

We outsource certain labor-intensive and specialized services, such as cleaning, greening and gardening, and repair and maintenance services, to third-party subcontractors. In 2018, 2019 and 2020, our cleaning, greening, maintenance, security and fire protection costs, which were primarily outsourced to third-party subcontractors, amounted to RMB215.2 million, RMB260.7 million and RMB373.0 million, respectively, which accounted for 13.9%, 14.6% and 19.1%, respectively, of our total cost of sales. The increases in our subcontracting costs, recorded as cleaning, greening, maintenance, security and fire protection costs, during the Track Record Period were primarily due to (i) the expansion of our business; and (ii) our enlarged outsourcing scale in both absolute amount and proportion as a result of our cost control measures.

To cope with rising labor costs, we continue to implement a number of cost control measures, such as (i) employing technological solutions to replace manual labor and control labor costs; (ii) outsourcing certain labor-intensive tasks to third-party subcontractors while maintaining close supervision the services they provide; and (iii) optimizing our staffing structure and schedules to improve efficiency and standardizing operational procedures associated with our various services.

Competition

The PRC property management industry is intensely competitive and highly fragmented with numerous market participants. Our major competitors include large national, regional and local property management companies. We believe that we compete with our competitors on a number of factors, primarily including business scale, brand recognition, financial resources, price and service quality. Our ability to successfully compete against our competitors affects our ability to grow our business and our results of operations. According to CIA, we ranked 11th among the 2021 Top 100 Property Management Companies in China in terms of overall strength, based on data from the previous year on key factors such as management scale, operational performance, service quality, growth potential and social responsibility. We believe our current market position and our ability to compete effectively against our competitors depend primarily on quality of services, business operation, price, financial resources, brand recognition and reputation. If we fail to continue to compete effectively, we may lose our existing market position and experience a decrease in revenue and weakened profitability.

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SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES AND JUDGMENTS

When reviewing our combined financial statements, you should consider (i) our accounting policies that are significant to the preparation of our combined financial statements; (ii) the judgments and other uncertainties affecting the application of such policies; and (iii) the sensitivity of reported results to changes in conditions and assumptions. Some of our accounting policies involve subjective assumptions and estimates, as well as complex judgments relating to accounting items. We set forth below those accounting policies and estimates that we believe involve the most significant estimates and judgments used in the preparation of our financial statements. Our significant accounting policies, judgments and estimates, which are important for understanding our financial condition and results of operations, are set out in further details in Note 2 to the Accountant’s Report in Appendix I to this Document.

Revenue Recognition

Revenue is recognized when the control of services or goods is transferred to the customer. Depending on the terms of the contracts and the laws that apply to the contract, control of services and goods may be transferred over time or at a point in time.

During the Track Record Period, we primarily provided residential property management services and commercial property management services. Our residential property management services primarily consist of (i) basic property management services to residential properties; (ii) value-added services to non-property owners; and (iii) community value-added services.

(i) Basic property management services to residential properties. For basic residential property management services, we bill a fixed amount for the services we provide on a monthly basis, and recognize as revenue the amount to which we have a right to bill and that corresponds directly with the value of performance completed.

(ii) Value-added services to non-property owners. For value-added services to non- property owners, we typically bill our customers on monthly basis, and recognize revenue for the services that we have rendered over time.

(iii) Community value-added services. Our community value-added services include home living services, community asset management services, and community living services. For home living and community asset management services, we recognize revenue for the relevant services that we have rendered over time. For community living services, we recognize revenue when the relevant services are rendered, except for those fresh food purchase and delivery services, which are recognized when the food and beverage are delivered to the customers.

Our commercial property management services primarily consist of (i) basic property management services to commercial properties; and (ii) commercial operational and value- added services.

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(i) Basic property management services to commercial properties. For basic commercial property management services, we bill a fixed amount for the services we provide on a monthly basis, and recognize as revenue the amount to which we have a right to bill and that corresponds directly with the value of performance completed.

(ii) Commercial operational and value-added services. Our commercial operational and value-added services include office administration services, conference reception services, furnishing and decoration services, special cleaning and greening services, tenant sourcing services and commercial property transaction assistance services. We recognize revenue for the services that we have rendered over time.

Property, Plant and Equipment

Property, plant and equipment is stated at historical cost, which represents the expenditure to acquire an item, less depreciation, which is calculated using the straight-line method to allocate the item’s cost, net of its residual value, over its estimated useful life. An item’s residual value and useful life are reviewed and adjusted as appropriate at the end of each reporting period.

Current and Deferred Income Tax

Current Income Tax

Current income tax is calculated on the basis of the amounts we expect to pay to the tax authorities pursuant to relevant tax laws enacted or substantially enacted at the end of a reporting period in the countries where we or our subsidiaries operate and generate taxable income.

Deferred Income Tax

Deferred income tax is calculated using the liabilities method based on the temporary differences between the tax bases of assets and liabilities and their carrying amounts in the combined financial statements. Deferred income tax assets are recognized only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses. Deferred income tax assets and liabilities are not recognized for temporary differences between the carrying amount and tax bases of investments in foreign operations where we are able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

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Trade and Other Receivables

Trade receivables are amounts due from customers for services performed in the ordinary course of business. Trade and other receivables are classified as current assets if we expect to collect them within one year; otherwise, they are classified as non-current assets.

Trade and other receivables are recognized initially at the amount of consideration that is unconditional. If they contain significant financing components, they will be recognized initially at fair value instead. Subsequently, trade and other receivables are measured at amortized cost using the effective interest method.

Trade and Other Payables

Trade and other payables represent liabilities for goods or services that have been acquired in the ordinary course of business from our suppliers and amounts to be repaid by us to our counterparties. Trade and other payables are classified as current liabilities if payment is due within one year; otherwise, they are classified as non-current liabilities.

Trade and other payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.

DESCRIPTION OF CERTAIN COMBINED STATEMENTS OF COMPREHENSIVE INCOME ITEMS

The following table sets forth a summary of our combined statements of comprehensive income for the years indicated.

Year ended December 31, 2018 2019 2020 RMB’000

Revenue...... 1,823,448 2,170,101 2,597,422 Costofsales...... (1,552,185) (1,780,741) (1,953,253)

Gross profit ...... 271,263 389,360 644,169

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Year ended December 31, 2018 2019 2020 RMB’000

Administrative expenses ...... (272,423) (288,632) (325,067) Net impairment losses on financial assets...... (14,696) (25,517) (18,219) Other income ...... 1,167 10,846 15,643 Otherlosses–net...... (818) (2,177) (1,915)

Operating (loss)/profit ...... (15,507) 83,880 314,611 Finance income ...... 1,817 2,115 2,640 Finance costs ...... (61) (225) (210)

(Loss)/profit before income tax ...... (13,751) 85,770 317,041 Income tax credit/(expenses) ...... 2,111 (21,940) (77,290) – (Loss)/profit and total comprehensive (loss)/income for the year attributable to owners of the Company ...... (11,640) 63,830 239,751

Revenue

We generated revenue primarily from two business lines: (i) residential property management services; and (ii) commercial property management services.

• Residential property management services. We provide (i) basic property management services to residential properties, primarily including cleaning, security, and greening, and repair and maintenance services; (ii) value-added services to non-property owners, including pre-delivery services, sales office management services and other services; and (iii) community value-added services, including home living services, community asset management services and community living services.

• Commercial property management services. We provide (i) basic commercial property management services to commercial properties, primarily including security services, cleaning and greening services, and repair and maintenance services; and (ii) commercial operational and other value-added services.

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The table below sets forth a breakdown of our total revenue by business line for the years indicated.

For the year ended December 31, 2018 2019 2020 RMB’000 % RMB’000 % RMB’000 %

Residential property management services ...... 1,091,677 59.9 1,388,771 64.0 1,757,126 67.6 – Basic property management services to residential properties ...... 772,193 42.3 938,783 43.3 1,123,903 43.2 – Value-added services to non- property owners ...... 247,228 13.6 360,019 16.6 540,428 20.8 – Community value-added services ...... 72,256 4.0 89,969 4.1 92,795 3.6 Commercial property management services ...... 731,771 40.1 781,330 36.0 840,296 32.4 – Basic property management services to commercial properties ...... 588,386 32.2 620,904 28.6 658,504 25.4 – Commercial operational and value-added services ...... 143,385 7.9 160,426 7.4 181,792 7.0

Total...... 1,823,448 100.0 2,170,101 100.0 2,597,422 100.0

The table below sets forth a breakdown of our total revenue by type of ultimate paying customers for the years indicated.

For the year ended December 31, 2018 2019 2020 RMB’000 % RMB’000 % RMB’000 %

Total...... 1,823,448 100.0 2,170,101 100.0 2,597,422 100.0

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Revenue from Residential Property Management Services

Revenue from our residential property management services, which primarily consists of (i) basic property management services to residential properties; (ii) value-added services to non-property owners; and (iii) community value-added services, was RMB1,091.7 million, RMB1,388.8 million, and RMB1,757.1 million, respectively, for 2018, 2019 and 2020, which accounted for 59.9%, 64.0%, and 67.6%, respectively, of our total revenue for the same years. The following table sets forth a breakdown of our total revenue under our residential property management services by business line during the Track Record Period.

For the year ended December 31, 2018 2019 2020 RMB’000 % RMB’000 % RMB’000 %

Basic property management services to residential properties ...... 772,193 70.7 938,783 67.6 1,123,903 64.0 Value-added services to non-property owners ...... 247,228 22.6 360,019 25.9 540,428 30.8 Community value-added services ...... 72,256 6.7 89,969 6.5 92,795 5.2

Total...... 1,091,677 100.0 1,388,771 100.0 1,757,126 100.0

Basic Property Management Services to Residential Properties

We offer a wide range of basic property management services to residential property owners, residents and property developers. Our services typically include cleaning services, security services, greening and gardening services, and repair and maintenance services.

During the Track Record Period, all of our residential property management fees were charged on a lump sum basis. We expect property management fees charged on a lump sum basis to continue to account for substantially all if not all of our revenue from property management services to residential properties in the foreseeable future.

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The following table sets forth a breakdown of our average residential property management fee by source and type of projects for the years indicated.

Year ended December 31, 2018 2019 2020 RMB per sq.m. per month

Residential properties – R&F Group(1) 2.43 2.43 2.42 – Joint ventures and associates of R&F Group(2) 2.28 2.30 2.33 – Independent third-party property developers(3) – – 2.20 Overall 2.42 2.42 2.41

Notes:

(1) Refers to properties solely developed by R&F Group or jointly developed by R&F Group and independent third-party property developers in which R&F Group held a controlling interest. (2) Refer to properties jointly developed by R&F Group and independent third-party property developers in which R&F Group did not hold a controlling interest. (3) Refer to properties solely developed by independent third party property developers.

To facilitate our management, we divide our geographic coverage into seven major regions in China, namely, Southern China, Southwestern China, Northern China, Northwestern China, Eastern China, Central China and Northeastern China. The table below sets forth a breakdown of our total number of projects under management and GFA under management as of the end of years indicated and revenue from basic property management services to residential properties for the years indicated by geographic region.

Total ...... 190 40,097 772,193 100.0 226 47,477 938,783 100.0 295 58,142 1,123,903 100.0

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Notes:

(1) Includes Guangdong Province and Hainan Province.

(2) Includes Sichuan Province, Chongqing Municipality, Yunnan Province and Guizhou Province.

(3) Includes Beijing Municipality, Tianjin Municipality, Hebei Province, Shanxi Province and central Inner Mongolia Autonomous Region (Hohhot City, Baotou City and Ulanqab City).

(4) Includes Shaanxi Province and Xinjiang Uygur Autonomous Region.

(5) Includes Shanghai Municipality, Jiangsu Province, Zhejiang Province, Shandong Province, Anhui Province, Fujian Province and Jiangxi Province.

(6) Includes Henan Province, Hubei Province and Hunan Province.

(7) Includes Heilongjiang Province, Liaoning Province and east Inner Mongolia Autonomous Region.

Historically, we predominantly provided property management services to and generated revenues from properties developed solely by R&F Group or joint ventures and associates of R&F Group. In 2018, 2019 and 2020, the revenue generated from property management services to residential properties we provided to projects developed by R&F Group amounted to RMB742.5 million, RMB900.6 million, and RMB1,072.2 million, respectively, accounting for 96.2%, 95.9%, and 95.4%, respectively, of our total revenue generated from property management services to residential properties for those same years. The table below sets forth a breakdown of our total GFA of residential properties under management as of the end of the years indicated, and revenue generated from basic property management services to residential properties for the years indicated, by the type of property developer.

As of or for the year ended December 31, 2018 2019 2020 GFA under GFA under GFA under management Revenue management Revenue management Revenue sq.m.’000 RMB’000 % sq.m.’000 RMB’000 % sq.m.’000 RMB’000 %

R&F Group(1) ..... 38,397 742,494 96.2 45,108 900,599 95.9 55,084 1,072,191 95.4 Joint ventures and associates of R&F Group(2)...... 1,700 29,699 3.8 2,368 38,184 4.1 3,038 51,606 4.6 Independent third- party property developers(3) .... – – – – – – 20 106 0.0

Total ...... 40,097 772,193 100.0 47,477 938,783 100.0 58,142 1,123,903 100.0

Notes:

(1) Refers to properties solely developed by R&F Group or jointly developed by R&F Group and independent third-party property developers in which R&F Group held a controlling interest.

(2) Refer to properties jointly developed by R&F Group and independent third-party property developers in which R&F Group did not hold a controlling interest.

(3) Refer to properties developed solely by independent third-party property developers.

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The following table sets forth a breakdown of our revenue generated from basic property management services to residential properties by type of customer during the years indicated.

For the year ended December 31, 2019 2019 2020 RMB’000 % RMB’000 % RMB’000 %

Property developers ...... – – – – 17,228 1.5 Property owners, owner’s associations and tenants ..... 772,193 100.0 938,783 100.0 1,106,675 98.5

Total...... 772,193 100.0 938,783 100.0 1,123,903 100.0

Value-added Services to Non-property Owners

We provide property developers full-cycle value-added services covering various stages of the residential property development and delivery process. Our value-added services to non-property owners include (i) preliminary planning and design consultancy services and pre-delivery services in which we advise on various stages of property developers’ business operations from a property management perspective and inspect the properties to be delivered as well as assist in the delivery process; (ii) sales office management services in which we provide property management services to property developers’ sales offices and show flats; and (iii) other specially commissioned services, such as pre-delivery cleaning and greening services and installation of smart parking system as requested by the property developers.

In 2018, 2019 and 2020, revenue generated from our value-added services to non- property owners amounted to approximately RMB247.2 million, RMB360.0 million, and RMB540.4 million, respectively, accounting for approximately 22.6%, 25.9%, and 30.8%, respectively, of our revenue from residential property management services for the same years.

Community Value-added Services

We provide community value-added services primarily to property owners and residents, such as (i) home living services, in which we primarily help property owners and residents with daily house cleaning, decoration and furnishing services and repair and maintenance services; (ii) community operation services, in which we rent out leasable common area, advertising spaces and parking space and assist property owners in selling and renting out their properties; and (iii) community living services, in which we primarily provide recreation center operation services, group purchase facilitation services and ticketing agency services.

In 2018, 2019 and 2020, revenue generated from our community value-added services amounted to approximately RMB72.3 million, RMB90.0 million, and RMB92.8 million, respectively, accounting for approximately 6.7%, 6.5%, and 5.2%, respectively, of our revenue from residential property management services for the same years.

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Revenue from Commercial Property Management Services

We provide commercial property management services to commercial properties, including retail properties, office buildings, serviced apartments and others. During the Track Record Period, revenue from our commercial property management services, which primarily consists of (i) basic property management services to commercial properties; and (ii) commercial operational and value-added services, was RMB731.8 million, RMB781.3 million and RMB840.3 million, respectively, which accounted for 40.1%, 36.0% and 32.4%, respectively, of our total revenue for the same years. The following table sets forth a breakdown of our revenue under our commercial property management services by business line during the Track Record Period.

For the year ended December 31, 2018 2019 2020 RMB’000 % RMB’000 % RMB’000 %

Basic property management services to commercial properties ...... 588,386 80.4 620,904 79.5 658,504 78.4 Commercial operational and value-added services ...... 143,385 19.6 160,426 20.5 181,792 21.6

Total...... 731,771 100.0 781,330 100.0 840,296 100.0

Basic Property Management Services to Commercial Properties

We offer a wide range of basic property management services to commercial property owners, tenants and property developers. Our services typically include cleaning services, security services, greening and gardening services, and repair and maintenance services.

During the Track Record Period, all of our commercial property management fees were charged on a lump sum basis. We expect commercial property management fees charged on a lump sum basis to continue to account for substantially all of our revenue from basic property management services to commercial properties in the foreseeable future.

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The table below sets forth a breakdown of our total number of projects under management and GFA under management as of the end of years indicated and revenue from basic property management services to commercial properties for the years indicated by geographic region.

As of/for the year ended December 31, 2018 2019 2020 Number of Number of Number of projects projects projects under GFA under under GFA under under GFA under management management Revenue management management Revenue management management Revenue sq.m’000. RMB’000 % sq.m’000. RMB’000 % sq.m’000. RMB’000 %

Total ..... 203 8,871 588,386 100.0 224 10,172 620,904 100.0 257 11,218 658,504 100.0

Notes:

(1) Includes Guangdong Province and Hainan Province.

(2) Includes Sichuan Province, Chongqing Municipality and Guizhou Province.

(3) Includes Beijing Municipality, Tianjin Municipality, Hebei Province, Shanxi Province, central Inner Mongolia Autonomous Region (Hohhot City, Baotou City).

(4) Includes Shaanxi Province and Xinjiang Uygur Autonomous Region.

(5) Includes Shanghai Municipality, Jiangsu Province, Zhejiang Province, Shandong Province, Anhui Province and Fujian Province.

(6) Includes Henan Province, Hubei Province and Hunan Province.

(7) Includes Heilongjiang Province, Liaoning Province and east Inner Mongolia Autonomous Region (Tongliao City).

We have a long-term and stable cooperation with R&F Group, and have provided basic commercial property management services to all commercial properties developed by R&F Group. In 2018, 2019 and 2020, the revenue generated from basic property management services to commercial properties we provided to projects developed by R&F Group amounted to RMB581.1 million, RMB608.7 million, and RMB642.8 million, respectively, accounting for 98.8%, 98.0%, and 97.6%, respectively, of our revenue generated from commercial property management services for those same years. The table below sets forth a breakdown of our total

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GFA of commercial properties under management as of the end of the years indicated, and revenue generated from basic property management services to commercial properties for the years indicated, by the type of property developer.

R&F Group(1)...... 8,357 581,131 98.8 9,571 608,679 98.0 10,578 642,821 97.6 Joint ventures and associates of R&F Group(2) ...... 514 7,255 1.2 601 12,225 2.0 601 15,646 2.4 Independent third-party property developers(3) ..... – – – – – – 39 37 0.0

Total ...... 8,871 588,386 100.0 10,172 620,904 100.0 11,218 658,504 100.0

Notes:

(1) Refers to properties solely developed by R&F Group or jointly developed by R&F Group and independent third-party property developers in which R&F Group held a controlling interest.

(2) Refer to properties jointly developed by R&F Group and independent third-party property developers in which R&F Group did not hold a controlling interest.

(3) Refer to properties developed solely by independent third-party property developers.

The commercial properties that we manage primarily include retail properties, office buildings, serviced apartments. Other commercial properties that we manage include education institutes. The following table sets forth a breakdown of our total GFA under management by property type as of the dates indicated, and revenue from basic property management services by property type for the years indicated.

For the year ended December 31, 2018 2019 2020 RMB’000 % RMB’000 % RMB’000 %

Retail properties ...... 136,247 23.2 139,998 22.5 115,844 17.7 Office buildings ...... 380,436 64.6 398,320 64.2 436,182 66.2 Serviced apartments ...... 71,546 12.2 82,429 13.3 106,321 16.1 Others ...... 157 0.0 157 0.0 157 0.0

Total...... 588,386 100.0 620,904 100.0 658,504 100.0

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The following table sets forth a breakdown of our revenue generated from basic property management services to commercial properties by type of customer during the years indicated.

For the year ended December 31, 2018 2019 2020 RMB’000 % RMB’000 % RMB’000 %

Property developers and property owners ...... 488,750 83.1 526,998 84.9 565,335 85.9 Tenants ...... 99,636 16.9 93,906 15.1 93,169 14.1

Total...... 588,386 100.0 620,904 100.0 658,504 100.0

Commercial Operational and Value-added Services

We also provide commercial operational and value-added services, including (i) office administration services; (ii) conference reception services; (iii) furnishing and decoration services; (iv) special cleaning and greening services; (v) tenant sourcing services; and (vi) commercial property transaction assistance services.

In 2018, 2019 and 2020, revenue generated from commercial operational and value-added services amounted to approximately RMB143.4 million, RMB160.4 million, and RMB181.8 million, respectively, accounting for approximately 19.6%, 20.5%, and 21.6%, respectively, of our revenue generated from commercial property management services for the same years.

Cost of Sales

Our cost of sales represents costs directly attributable to the provision of our services and includes (i) labor costs; (ii) cleaning, greening, maintenance, security and fire protection costs, which mainly represent the greening and cleaning expenses, maintenance costs, and cost of security and fire protection for the corresponding services that we typically outsource to third-party subcontractors; (iii) utility costs; (iv) office expenses; and (v) other expenses.

The following table sets forth a breakdown of our cost of sales by type during the years indicated.

Year ended December 31, 2018 2019 2020 RMB’000 % RMB’000 % RMB’000 %

Laborcosts...... 1,098,619 70.8 1,267,016 71.2 1,300,436 66.6 Cleaning, greening, maintenance, security and fire protection costs ...... 215,227 13.9 260,696 14.6 373,031 19.1 Utility costs ...... 159,841 10.3 162,892 9.1 170,564 8.7 Office expenses ...... 35,584 2.3 43,987 2.5 53,071 2.7 Others ...... 42,914 2.7 46,150 2.6 56,151 2.9

Total...... 1,552,185 100.0 1,780,741 100.0 1,953,253 100.0

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During the Track Record Period, the main components of our cost of sales were labor costs and cleaning, greening, maintenance, security and fire protection costs. The increases in our labor costs during the Track Record Period were mainly due to the increases in our employee headcount as a result of our business expansion and the increase in average market salary. Cleaning, greening, maintenance, security and fire protection costs mainly include the fees incurred for the services outsourced to subcontractors. The increases in cleaning, greening, maintenance, security and fire protection costs during the Track Record Period were mainly due to (i) the increases in our GFA under management resulting from the expansion of our property management services; and (ii) the increases in the amount and proportion of services that we outsourced to qualified subcontractors as part of our cost control measures.

The following table sets forth a breakdown of our cost of sales by business line during the years indicated.

Year ended December 31, 2018 2019 2020 RMB’000 % RMB’000 % RMB’000 %

Residential property management services ...... 1,011,164 65.2 1,224,628 68.8 1,385,287 70.9 – Basic property management services to residential properties ...... 739,972 47.7 867,235 48.7 967,426 49.5 – Value-added services to non-property owners ...... 218,165 14.1 296,600 16.7 366,360 18.8 – Community value-added services ...... 53,027 3.4 60,793 3.4 51,501 2.6 Commercial property management services ...... 541,021 34.8 556,113 31.2 567,966 29.1 – Basic property management services to commercial properties ...... 454,969 29.3 465,946 26.1 477,058 24.4 – Commercial operational and value-added services ...... 86,052 5.5 90,167 5.1 90,908 4.7

Total...... 1,552,185 100.0 1,780,741 100.0 1,953,253 100.0

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Gross Profit and Gross Profit Margin

Year ended December 31, 2018 2019 2020 Gross Gross Gross Gross Profit Gross Profit Gross Profit Profit Margin Profit Margin Profit Margin RMB’000 % RMB’000 % RMB’000 %

Residential property management services ...... 80,513 7.4 164,143 11.8 371,839 21.2 Commercial property management services ...... 190,750 26.1 225,217 28.8 272,330 32.4

Total...... 271,263 14.9 389,360 17.9 644,169 24.8

Residential Property Management Services

Year ended December 31, 2018 2019 2020 Gross Gross Gross Gross profit Gross profit Gross profit profit margin profit margin profit margin RMB’000 % RMB’000 % RMB’000 %

Total...... 80,513 7.4 164,143 11.8 371,839 21.2

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The increases in our gross profit margin for our basic property management services to residential properties from 2018 to 2020 were attributed to our effective cost control. The average residential property management fees that we charge for property management services to residential properties remained stable at RMB2.42 per sq.m. per month, RMB2.42 per sq.m. per month and RMB2.41 per sq.m. per month during the Track Record Period. Our gross profit margin for basic property management services to residential properties increased from 4.2% in 2018 to 7.6% in 2019, primarily due to (i) a decrease in cost of sales per sq.m. as we expanded and realized greater economies of scale; and (ii) our effective cost control manifested by outsourcing certain services with relatively low gross profit margin, such as cleaning, security and greening services, to third-party subcontractors. Our gross profit margin for basic property management services to residential properties further increased from 7.6% in 2019 to 13.9% in 2020, primarily due to the social insurance contribution exemption granted by the central and local governmental authorities in China as COVID-19 relief measures between February and December 2020.

The following table sets forth our gross profit and gross profit margin from our basic property management services to residential properties by type of property developer for the years indicated.

Year ended December 31, 2018 2019 2020 Gross Gross Gross Gross profit Gross profit Gross profit profit margin profit margin profit margin RMB’000 % RMB’000 % RMB’000 %

R&F Group(1) ...... 23,871 3.2 57,736 6.4 147,000 13.7 Joint ventures and associates of R&F Group(2) ...... 8,350 28.1 13,812 36.2 9,494 18.4 Independent third-party property developers(3) ...... – – – – (17) (16.0)

Total...... 32,221 4.2 71,548 7.6 156,477 13.9

Notes:

(1) Refers to residential properties solely developed by R&F Group or jointly developed by R&F Group and independent third-party property developers in which R&F Group held a controlling interest.

(2) Refer to residential properties jointly developed by R&F Group and independent third-party property developers in which R&F Group did not hold a controlling interest.

(3) Refer to residential properties developed solely by independent third-party property developers.

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Our gross profit margin for properties developed by joint ventures or associates of R&F Group decreased significantly from 36.2% in 2019 to 18.4% in 2020, primarily due to a loss that we incurred in a project in Zhengzhou.

Our gross profit margin for value-added services to non-property owners increased from 11.8% in 2018 to 17.6% in 2019, and further increased from 17.6% in 2019 to 32.2% in 2020, primarily due to (i) the continued expansion of our pre-delivery services with relatively high gross profit margin; and (ii) the social insurance contribution exemption granted by the central and local governmental authorities in China as COVID-19 relief measures between February 2020 and December 2020.

Our gross profit margin for community value-added services increased from 26.6% in 2018 to 32.4% in 2019, primarily due to the expansion of our home living services which typically carry relatively high gross profit margin. The gross profit margin for community value-added services further increased from 32.4% in 2019 to 44.5% in 2020, primarily because (i) we continued to expand our home living services; (ii) we continued to explore services with high gross profit margins and to diversify our service mix; (iii) we began to realize a positive gross profit from our community living services due to an increase in the demand for group purchase facilitation services and fresh food distribution during the COVID-19 pandemic; and (iv) the social insurance contribution exemption granted by the central and local governmental authorities in China as COVID-19 relief measures between February 2020 and December 2020.

Commercial Property Management Services

Year ended December 31, 2018 2019 2020 Gross Gross Gross Gross profit Gross profit Gross profit profit margin profit margin profit margin RMB’000 % RMB’000 % RMB’000 %

Basic property management services to commercial properties ...... 133,417 22.7 154,958 25.0 181,446 27.6 Commercial operational and value-added services ...... 57,333 40.0 70,259 43.8 90,884 50.0

Total...... 190,750 26.1 225,217 28.8 272,330 32.4

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The following table sets forth our gross profit and gross profit margin from our basic property management services to commercial properties by type of property developer for the years indicated.

Year ended December 31, 2018 2019 2020 Gross Gross Gross Gross profit Gross profit Gross profit profit margin profit margin profit margin RMB’000 % RMB’000 % RMB’000 %

R&F Group(1) ...... 132,467 22.8 153,738 25.3 179,462 27.9 Joint ventures and associates of R&F Group(2) ...... 950 13.1 1,220 10.0 2,006 12.8 Independent third-party property developers(3) ...... – – – – (22) (59.5)

Total...... 133,417 22.7 154,958 25.0 181,446 27.6

Notes:

(1) Refers to properties solely developed by R&F Group or jointly developed by R&F Group and independent third-party property developers in which R&F Group held a controlling interest.

(2) Refer to properties jointly developed by R&F Group and independent third-party property developers in which R&F Group did not hold a controlling interest.

(3) Refer to properties developed solely by independent third-party property developers.

Our gross profit margin for properties developed by joint ventures or associates of R&F Group decreased from 13.1% in 2018 to 10.0% in 2019, primarily because in 2018 the majority of the properties under our management developed by joint ventures or associates of R&F Group were commercial properties, which typically carry relatively high gross profit margins; whereas in 2019 more residential properties, which typically carry lower gross profit margins, developed by joint ventures or associates of R&F Group were delivered to us for our management, lowering the overall gross profit margin for properties developed by joint ventures or associates of R&F Group.

Gross profit margin for our commercial operational and value-added services was 40.0%, 43.8% and 50.0%, respectively, in 2018, 2019 and 2020. Our gross profit margin for commercial operational and other value-added services increased from 40.0% in 2018 to 43.8% in 2019, and further increased from 43.8% in 2019 to 50.0% in 2020, primarily due to (i) our continuous exploration and diversification of new services with high gross profit margins; (ii) our outsourcing of services with relatively low gross profit margins to third-party subcontractors; (iii) the social insurance contribution exemption granted by the central and local governmental authorities in China as COVID-19 relief measures between February 2020 and December 2020.

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Administrative Expenses

Our administrative expenses primarily include (i) employee benefit expenses, (ii) office expenses, (iii) professional service fees, (iv) depreciation and amortization charges, (v) traveling and entertainment expenses, and (vi) others, which primarily consist of employee uniform expenses, hiring expenses and bank charges. The following table sets forth a breakdown of our administrative expenses for the years indicated.

Year ended December 31, 2018 2019 2020 RMB’000 % RMB’000 % RMB’000 %

Employee benefit expenses .... 234,506 86.1 247,074 85.6 270,718 83.3 Office expenses ...... 11,247 4.1 11,668 4.0 13,383 4.1 Professional service fees ...... 2,860 1.1 1,561 0.6 3,340 1.0 Depreciation and amortization charges ...... 2,826 1.0 5,746 2.0 6,410 2.0 Traveling and entertainment expenses ...... 8,716 3.2 8,956 3.1 8,511 2.6 Others ...... 12,268 4.5 13,627 4.7 22,705 7.0

Total...... 272,423 100.0 288,632 100.0 325,067 100.0

Our administrative expenses increased from RMB272.4 million in 2018 to RMB288.6 million in 2019, and further increased to RMB325.1 million in 2020. The increase in our administrative expenses during the Track Record Period was primarily due to the increases in employee benefit expenses for our administrative staff, which was in line with our business expansion. The increase in our administrative expenses from 2019 to 2020 was also attributable to the new services that we provided through our Fulin Meijia (富鄰美家) brand in 2020.

Net Impairment Losses on Financial Assets

Our net impairment losses on financial assets primarily represent provisions for losses arising from potential bad debts in respect of our trade and other receivables in the ordinary course of business. In 2018, 2019 and 2020 we recorded net impairment losses on financial assets of RMB14.7 million, RMB25.5 million and RMB18.2 million, respectively. The increase in our net impairment losses on financial assets from 2018 to 2019 generally corresponded to an increase in trade receivables from third parties during the same period, which was in line with our business growth. The decrease in our net impairment losses on financial assets from 2019 to 2020 was primarily due to a decrease in our expected credit loss as a result of our enhanced collection effort.

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Other Income

Our other income primarily consist of (i) value-added tax deductibles, (ii) government grants, and (iii) others, which primarily consist of income from waste disposal for our customers.

The following table sets forth a breakdown of our other income during the years indicated.

Year ended December 31, 2018 2019 2020 RMB’000 % RMB’000 % RMB’000 %

Value-added tax deductibles(1) . . – – 5,943 54.8 8,636 55.2 Government grants(2) ...... 801 68.6 4,424 40.8 6,698 42.8 Others ...... 366 31.4 479 4.4 309 2.0

Total...... 1,167 100.0 10,846 100.0 15,643 100.0

Notes:

(1) Value-added tax deductibles mainly represented additional deduction of input value-added tax applicable to us and certain of our subsidiaries.

(2) Government grants mainly consisted of refund of paid unemployment insurance. There are no unfulfilled conditions or other contingencies attached to these grants.

Other Losses – Net

Our net other losses primarily consist of (i) net loss on disposal of property, plant and equipment, and (ii) penalty and others. The following table sets forth a breakdown of our net other losses during the years indicated.

Year ended December 31, 2018 2019 2020 RMB’000 % RMB’000 % RMB’000 %

Net loss on disposal of property, plant and equipment ...... 77 9.4 122 5.6 101 5.3 Penalty and others ...... 741 90.6 2,055 94.4 1,814 94.7

Total...... 818 100.0 2,177 100.0 1,915 100.0

Our net other losses increased significantly from RMB0.8 million in 2018 to RMB2.2 million in 2019, primarily due to the increases in the administrative penalty fees that we paid in 2019.

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Finance Income

Our finance income primarily consists of interest income from bank deposits. We recorded finance income of RMB1.8 million, RMB2.1 million and RMB2.6 million, respectively, in 2018, 2019 and 2020.

Finance Cost

Our finance cost primarily consists of interest related to lease liabilities. We recorded finance cost of RMB61,000, RMB0.2 million and RMB0.2 million, respectively, in 2018, 2019 and 2020.

Income Tax (Credit)/Expenses

Income tax (credit)/expenses consist of current and deferred taxes payable in the PRC by our Company and our subsidiaries. The following table sets forth a breakdown of our income tax (credit)/expenses for the years indicated.

Year ended December 31, 2018 2019 2020 RMB’000

Current tax – PRC Corporate Income Tax Provision for the year ...... 183 7,062 55,070 Deferred Tax Origination and reversal of temporary differences ...... (2,294) 14,878 22,220

Total ...... (2,111) 21,940 77,290

In 2018, we recorded an income tax credit of RMB2.1 million. In 2019 and 2020, our effective income tax rates, calculated as income tax expenses divided by profit before tax, were approximately 25.6% and 24.4%, respectively. Some of our subsidiaries and branches located in Chongqing benefitted from the preferential income tax rate of 15.0% during the Track Record Period pursuant to the Notice Regarding the Tax Policies Relating to the Strategy of Further Developing the Western Region of China jointly issued by the NDRC, SAT and the Ministry of Finance in 2011, and some of our subsidiaries located in Hainan enjoyed the preferential income tax rate of 15.0% during the Track Record Period pursuant to Notice by the Ministry of Finance and the State Taxation Administration of Preferential Income Tax Policies for Enterprises in Hainan Free Trade Port (No. 31 [2020] of the Ministry of Finance) issued on June 23, 2020. Please see “Regulatory Overview – Tax Laws and Regulations – Income Tax” for more information. The rest of our subsidiaries in the PRC were subject to the statutory income tax rate of 25.0% for the Track Record Period.

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RESULTS OF OPERATIONS

Year Ended December 31, 2020 Compared to Year Ended December 31, 2019

Revenue

Our revenue increased by 19.7% from RMB2,170.1 million in 2019 to RMB2,597.4 million in 2020, primarily due to the growth in revenue generated from the following services.

• Residential property management services. Our revenue from residential property management services increased by 26.5% from RMB1,388.8 million in 2019 to RMB1,757.1 million in 2020, primarily due to (i) a 23.1% increase in the aggregate GFA of residential properties under our management from 47.5 million sq.m. as of December 31, 2019 to 58.1 million sq.m. as of December 31, 2020; and (ii) the expansion of our preliminary planning and design consultancy services and pre-delivery services and sales office management services from RMB360.0 million in 2019 to RMB540.4 million in 2020.

• Commercial property management services. Our revenue from commercial property management services increased by 7.6% from RMB781.3 million in 2019 to RMB840.3 million in 2020, primarily due to (i) a 9.8% increase in the aggregate GFA of commercial properties under our management from 10.2 million sq.m. as of December 31, 2019 to 11.2 million sq.m. as of December 31, 2020; and (ii) our expansion of tenant sourcing services and commercial operational services.

Cost of Sales

Our cost of sales increased by 9.7% from RMB1,780.7 million in 2019 to RMB1,953.3 million in 2020, primarily due to our business expansion.

Gross Profit and Gross Profit Margin

As a result of the foregoing changes in revenue and cost of sales, our gross profit increased by 65.4% from RMB389.4 million in 2019 to RMB644.2 million in 2020, primarily due to the growth in revenue generated from the following services.

• Residential property management services. Our gross profit for residential property management services increased significantly from RMB164.1 million in 2019 to RMB371.8 million in 2020, and our gross profit margin for residential property management services increased from 11.8% in 2019 to 21.2% in 2020, primarily due to (i) the increased contribution from our pre-delivery services; and (ii) our realization of positive gross profit from our community living services due to an increase in the demand for group purchases and fresh food distribution during the COVID-19 pandemic; and (iii) the social insurance contribution exemption granted by the central and local governmental authorities in China as COVID-19 relief measures between February and December 2020.

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• Commercial property management services. Our gross profit for commercial property management services increased by 20.9% from RMB225.2 million in 2019 to RMB272.3 million in 2020, and our gross profit margin for commercial property management services increased from 28.8% in 2019 to 32.4% in 2020, primarily due to (i) our continuous exploration and diversification of new services with high gross profit margins; and (ii) the social insurance contribution exemption granted by the central and local governmental authorities in China as COVID-19 relief measures between February and December 2020.

Administrative Expenses

Our administrative expenses increased by 12.6% from RMB288.6 million in 2019 to RMB325.1 million in 2020, primarily due to the increases in employee benefit expenses for our administrative staff, which was in line with our business expansion.

Net Impairment Losses on Financial Assets

Our net impairment loss on financial assets decreased by 28.6% from RMB25.5 million in 2019 to RMB18.2 million in 2020, primarily due to a decrease in our expected credit loss as a result of our enhanced collection effort.

Other Income

Our other income increased by 44.2% from RMB10.8 million in 2019 to RMB15.6 million in 2020, primarily due to (i) the value-added tax (“VAT”) deductibles as a result of an incentive policy in favor of the lifestyle service providers; and (ii) an increase in the government grants that we received from RMB4.4 million in 2019 to RMB6.7 million in 2020 for job stabilization.

Other Losses – Net

Our net other losses remained relatively stable between 2019 and 2020, and was RMB2.2 million and RMB1.9 million respectively.

Finance Income

Our finance income increased by 24.8% from RMB2.1 million in 2019 to RMB2.6 million in 2020 as a result of an increase in our bank deposit.

Finance Costs

Our finance costs remained the same between 2019 and 2020, and was RMB0.2 million.

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Profit before Income Tax

As a result of the foregoing, our profit before income tax increased significantly from RMB85.8 million in 2019 to RMB317.0 million in 2020.

Income Tax Expenses

Our income tax expenses increased from RMB21.9 million in 2019 to RMB77.3 million in 2020, primarily due to an increase in profit before income tax in 2020.

Total Comprehensive Income for the Year

As a result of the foregoing, our total comprehensive income for the year increased from RMB63.8 million in 2019 to RMB239.8 million in 2020.

Year Ended December 31, 2019 Compared to Year Ended December 31, 2018

Revenue

Our revenue increased by 19.0% from RMB1,823.4 million in 2018 to RMB2,170.1 million in 2019, primarily due to the growth in revenue generated from the following services.

• Residential property management services. Our revenue from residential property management services increased by 27.2% from RMB1,091.7 million in 2018 to RMB1,388.8 million in 2019, primarily due to (i) an increase in revenue for our property management services to residential properties from RMB772.2 million in 2018 to RMB938.8 million in 2019 as a result of a 18.5% increase in GFA of residential properties under our management in 2019; and (ii) an increase in revenue for our value-added services to non-property owners from RMB247.2 million in 2018 to RMB360.0 million in 2019 as a result of an expansion of our pre-delivery services and sales office management services.

• Commercial property management services. Our revenue from commercial property management services increased by 6.8% from RMB731.8 million in 2018 to RMB781.3 million in 2019, primarily due to an increase in revenue for our basic property management services to commercial properties from RMB588.4 million in 2018 to RMB620.9 million in 2019 as a result of a 14.7% increase in GFA of commercial properties under our management in 2019.

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Cost of Sales

Our cost of sales increased by 14.7% from RMB1,552.2 million in 2018 to RMB1,780.7 million in 2019, primarily due to (i) increases in employee benefit expenses and maintenance costs as a result of our business expansion; and (ii) an increase in greening and cleaning expenses as we outsourced certain greening and cleaning services to third-party subcontractors to optimize our cost efficiency. Our revenue increased at a faster rate than our cost of sales from 2018 to 2019, primarily due to (i) our realization of economy of scale as a result of our organic growth; and (ii) our efficient cost management.

Gross Profit and Gross Profit Margin

As a result of the foregoing changes in revenue and cost of sales, our gross profit increased by 43.5% from RMB271.3 million in 2018 to RMB389.4 million in 2019, primarily because of the enhanced profitability of our residential property management services and commercial property management services.

• Residential property management services. Our gross profit for residential property management services increased significantly from RMB80.5 million in 2018 to RMB164.1 million in 2019, primarily due to (i) a decrease in cost of sales per sq.m. as we expanded and realized greater economies of scale; (ii) our effective cost control manifested by outsourcing certain services with relatively low gross profit margin, such as cleaning and greening, to third-party subcontractors; and (iii) the increased contribution from our pre-delivery services, which were consulting in nature, and thus less labor-intensive as compared to our sales office management services and carried relatively high gross profit margin.

• Commercial property management services. Our gross profit for commercial property management services increased by 18.0% from RMB190.8 million in 2018 to RMB225.2 million in 2019, primarily due to our expansion of market research and positioning, tenant sourcing and opening preparation services.

Administrative Expenses

Our administrative expenses increased by 5.9% from RMB272.4 million in 2018 to RMB288.6 million in 2019, primarily due to (i) an increases in our employee benefit expenses as a result of our business expansion; and (ii) an increase in depreciation and amortization charges.

Net Impairment Losses on Financial Assets

Our net impairment losses on financial assets increased from RMB14.7 million in 2018 to RMB25.5 million in 2019, primarily due to an increase in our trade receivables from third parties, which was in line with our business expansion.

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Other Income

Our other income increased significantly from RMB1.2 million in 2018 to RMB10.8 million in 2019, primarily due to (i) an increase in VAT deductions for life service industry pursuant to notices released by the Ministry of Finance and State Administration of Taxation as part of China’s VAT reform; and (ii) non-recurring employment stabilization subsidies granted by the Guangzhou and Chongqing local governments to enterprises that adopted effective measures to conduct fewer layoffs and stabilize employment.

Other Losses – Net

Our net other losses increased significantly from RMB0.8 million in 2018 to RMB2.2 million in 2019, primarily due to the increases in the administrative penalty fees and firefighting facility rectification fees that we paid in 2019.

Finance Income

Our finance income remained relatively stable between 2018 and 2019, and was RMB1.8 million and RMB2.1 million, respectively.

Finance Costs

Our finance costs increased from RMB61,000 in 2018 to RMB0.2 million in 2019, primarily due to an increase in lease liabilities as a result of our demand for additional office space and employee dormitories, which was in line with our business expansion.

(Loss)/Profit before Income Tax

As a result of the foregoing, we turned a loss before income tax in the amount of RMB13.8 million in 2018 to a profit before income tax in the amount of RMB85.8 million in 2019.

Income Tax (Credit)/Expenses

We recorded income tax expenses in the amount of RMB21.9 million in 2019 as compared to an income tax credit in the amount of RMB2.1 million in 2018.

Total Comprehensive (Loss)/Income for the Year

We recorded total comprehensive loss in the amount of RMB11.6 million in 2018, primarily attributable to the free property management services that we provided with respect to certain unsold property units as we provided property management services to certain properties developed by R&F Group as a functional subsidiary. We turned total comprehensive loss of RMB11.6 million in 2018 to total comprehensive income of RMB63.8 million in 2019, primarily attributable to the increases in (i) our revenue, which was primarily driven by (a) an increase in the aggregate GFA under our management; and (b) an expansion of our pre-delivery services and sales office management services; and (ii) our gross profit, which was primarily driven by (a) a decrease in cost of sales per sq.m. as we expanded and realized greater economies of scale; (b) our effective cost control manifested by outsourcing certain services with relatively low gross profit margin, such as cleaning and greening, to third-party subcontractors; and (c) the increased contribution from services with high gross profit margins, such as our pre-delivery, market research and positioning, tenant sourcing and opening preparation services.

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DESCRIPTION OF CERTAIN COMBINED BALANCE SHEETS ITEMS

The following table sets forth our summary combined statement of balance sheets as of the dates indicated.

As at December 31, 2018 2019 2020 RMB’000 Assets Non-current assets Property, plant and equipment ...... 46,303 49,743 54,202 Right-of-useassets...... 3,645 6,005 4,863 Intangible assets...... 524 376 321 Deferred income tax assets...... 101,809 86,931 64,711 Othernon-currentassets...... 1,535 1,284 760

153,816 144,339 124,857

Current assets Trade and other receivables and prepayments ...... 1,316,511 443,803 1,230,994 Restricted cash ...... 167 142 – Cash and cash equivalents ...... 355,267 690,799 405,641

1,671,945 1,134,744 1,636,635

Total assets ...... 1,825,761 1,279,083 1,761,492

Equity Equity attributable to owners of the Company Combined capital ...... 15,000 300,000 – Reserves...... 2,500 2,500 18,930 Accumulated losses ...... (366,809) (402,979) (179,658)

Total deficit ...... (349,309) (100,479) (160,728)

Liabilities Non-current liabilities Lease liabilities ...... – 240 1,190 Contract liabilities ...... 34,798 34,553 34,875

34,798 34,793 36,065

Current liabilities Lease liabilities ...... 956 3,226 1,346 Trade and other payables ...... 1,938,834 1,128,775 1,559,945 Current income tax liabilities ...... 182 7,244 62,314 Contract liabilities ...... 200,300 205,524 262,550

2,140,272 1,344,769 1,886,155

Total liabilities ...... 2,175,070 1,379,562 1,922,220

Total equity and liabilities ...... 1,825,761 1,279,083 1,761,492

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Assets

Property, Plant and Equipment

Property, plant and equipment mainly consists of (i) buildings; (ii) furniture, fixtures and equipment; (iii) motor vehicles; and (iv) machinery, such as dehumidifiers, vacuum cleaners and lawn mowers. Property, plant and equipment increased from RMB46.3 million as of December 31, 2018 to RMB49.7 million as of December 31, 2019, and further increased to RMB54.2 million as of December 31, 2020, primarily due to our upgrade and procurement of additional machinery, vehicles, electronic equipment and office equipment as a result of our business expansion.

Right-of-Use Assets

Right-of-use assets mainly consist of leased properties used as offices and employee dormitories. Our right-of-use assets increased significantly from RMB3.6 million as of December 31, 2018 to RMB6.0 million as of December 31, 2019, primarily due to an increase in our demand for additional office space and employee dormitories as a result of our business expansion. Our right-of-use assets decreased to RMB4.9 million as of December 31, 2020 from RMB6.0 million as of December 31, 2019, primarily due to the depreciation in value of our right-of-use assets.

Intangible Assets

Intangible assets primarily represent our certain expenditures on purchasing computer software licenses, including customer relationship management (CRM) system, VAT invoice tax control and issuance software, and property management system. Our intangible assets decreased from RMB0.5 million as of December 31, 2018 to RMB0.4 million as of December 31, 2019, and further decreased to RMB0.3 million as of December 31, 2020, primarily due to the amortization in value of our intangible assets.

Deferred Income Tax Assets

Our deferred tax assets relate to temporary differences between our net profit for financial reporting purposes and taxable income for tax purposes. We had deferred income tax assets of RMB101.8 million, RMB86.9 million and RMB64.7 million, respectively, as of December 31, 2018, 2019, and 2020. We had deferred income tax assets in respect of tax losses of RMB76.7 million, RMB56.8 million and RMB31.7 million as of the same dates, respectively. See Note 25 to the Accountant’s Report included in Appendix I to this Document for more details.

Other Non-Current Assets

Other non-current assets primarily represent prepaid business tax and miscellaneous surcharges for property management fees and deposits that we previously collected from customers. During the Track Record Period, we recorded other non-current assets of RMB1.5 million, RMB1.3 million and RMB0.8 million, respectively.

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Trade Receivables

Trade receivables primarily arise from our provision of various services and sales of goods to related as well as third parties in the ordinary course of business. We recognize trade receivables upon rendering relevant property management or value-added services according to relevant agreements, and reduce trade receivables when property owners, residents, tenants, or property developers pay us the fees due. The following table sets forth a breakdown of our trade receivables as of the dates indicated.

As of December 31, 2018 2019 2020 RMB’000

Trade receivables...... – From related parties ...... 242,149 93,968 248,329 – From third parties ...... 285,206 339,558 354,954

Subtotal ...... 527,355 433,526 603,283 Less: Allowance for impairment of trade receivables ...... (90,598) (113,646) (115,475)

Total ...... 436,757 319,880 487,808

Before allowance for impairment of trade receivables, our trade receivables from related parties decreased by 61.2% from RMB242.1 million as of December 31, 2018 to RMB94.0 million as of December 31, 2019, primarily due to our effort to collect trade receivables from R&F Group in 2019 in preparation of Guangzhou Fuxing’s acquisition of Tianli Property. Our trade receivables from related parties subsequently rebounded to RMB248.3 million as of December 31, 2020, primarily due to our business expansion, which was in tandem with R&F Group’s growth. Our trade receivables from third parties increased by 19.1% from RMB285.2 million as of December 31, 2018 to RMB339.6 million as of December 31, 2019, and subsequently increased by 4.5% to RMB355.0 million as of December 31, 2020, primarily due to the increases in property management fee receivables as a result of an increase in the GFA under our management, which was in line with our business expansion.

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Our average trade receivable (before impairment) turnover days were 96 days, 81 days and 73 days in 2018, 2019 and 2020, respectively. Our average trade receivable (before impairment) turnover days for a certain period is calculated by dividing the average of the beginning and ending balances of trade receivables (before impairment) by revenue during the relevant period, multiplied by the number of days in that period. The following table sets forth our average trade receivables (before impairment) turnover days for related parties and for third parties during the years indicated.

For the year ended December 31, 2018 2019 2020

Average trade receivables turnover days ...... 96 81 73 Average trade receivables turnover days for related parties...... 288 165 103 Average trade receivables turnover days for third parties ...... 64 63 64

Our average trade receivable turnover days for related parties decreased from 288 days as of December 31, 2018 to 165 days for the year ended December 31, 2019, and further decreased to 103 days for the year ended December 31, 2020, primarily due to (i) our effort to settle and collect trade receivables from R&F Group in 2019; and (ii) our improved collection rate of property management fees from related parties as strengthened our supervision and management of the collection of trade receivables from related parties. Our average trade receivable turnover days for third parties remained relatively stable during the Track Record Period.

During the Track Record Period, trade receivables turnover days for related parties were generally longer than for third parties, primarily because given our corporate structure and long-lasting strategic relationship with R&F Group and its joint ventures and associates, the average payment period granted to our related companies was longer than that to third parties. In view of the relatively longer average turnover days for related parties as compared to third parties, we intend to strengthen credit controls over trade receivables from related parties with an aim to narrowing down the gap between our average trade receivable turnover days for related parties and for third parties after the [REDACTED]. We plan to designate special personnel to track the progress of collecting property management fees due from related parties, and regularly evaluate performance of such special personnel based on collection rate.

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As of the end of each reporting period, we conduct the ageing analysis of trade receivables based on the date of revenue recognition. The following table sets forth an ageing analysis of our trade receivables based on recognition date as of the dates indicated.

As of December 31, 2018 2019 2020 RMB’000

Within one year ...... 260,966 224,405 408,844 – Related parties ...... 124,220 63,893 248,329 – Third parties ...... 136,746 160,512 160,515 One to two years ...... 116,262 90,266 85,149 – Related parties ...... 62,410 17,889 – – Third parties ...... 53,852 72,377 85,149 Two to three years ...... 64,879 41,065 45,087 – Related parties ...... 31,362 5,555 – – Third parties ...... 33,517 35,510 45,087 Over three years ...... 85,248 77,790 64,203 – Related parties ...... 24,157 6,631 – – Third parties ...... 61,091 71,159 64,203

Total ...... 527,355 433,526 603,283

Trade receivables aged over one year amounted to RMB266.4 million, RMB209.1 million and RMB194.4 million, respectively, in 2018, 2019 and 2020, which accounted for 50.5%, 48.2% and 32.2%, respectively, of our total trade receivables as of the respective dates. Among these, trade receivables from related parties aged over one year mounted to RMB117.9 million, RMB30.1 million and nil, respectively, as of December 31, 2018, 2019 and 2020, which accounted for 22.4%, 6.9% and nil, respectively, of our total trade receivables as of the respective dates. We do not consider that there is any material recoverability issue for our trade receivables aged over one year. Such trade receivables mainly consisted of property management fees due from property owners and residents, and we have adopted a number of internal control measures on the collection of property management fees, including but not limited to implementation of software system to monitor the collection progress. In addition, we may seek legal actions as a last resort to collect long overdue property management fees.

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The following table sets forth the movements in the allowance for doubtful debts on trade receivables during the Track Record Period.

As of December 31, 2018 2019 2020 RMB’000

At 1 January ...... 82,986 90,598 113,646 Credit loss recognized ...... 14,700 31,117 10,796 Credit loss written off ...... (7,088) (8,069) (8,967)

At 31 December ...... 90,598 113,646 115,475

We have adopted a number of internal control measures on the collection of property management fees, including but not limited to regular communications with property owners and residents and implementation of software system to monitor the collection progress. In addition, we may seek legal actions as a last resort to collect long overdue property management fees.

As of February 28, 2021, approximately RMB41.2 million, or 16.6% of our trade receivables from related parties as of December 31, 2020, was settled. As of the same date, approximately RMB25.1 million, or 7.1% of our trade receivables from third parties as of December 31, 2020, was settled. Our Directors confirm that our related companies had not defaulted on payment of trade receivables during the Track Record Period and up to the Latest Practicable Date.

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Other Receivables and Prepayments

Our other receivables primarily consisted of (i) amounts due from related parties, which primarily include property management fees that our related parties collected on our behalf; (ii) payments on behalf of property owners to utility suppliers; (iii) deposit; and (iv) others, which primarily include social insurance provident fund that we paid on our employees’ behalf. Our prepayments primarily consisted of upfront payments for utility and gas. The following table sets forth a breakdown of our other receivables and prepayments as of the dates indicated.

As of December 31, 2018 2019 2020 RMB’000 Other receivables – Amounts due from related parties .... 798,720 25,586 610,974 – Payments on behalf of property owners ...... 71,789 80,395 105,647 – Deposits ...... 4,008 4,192 4,174 –Others...... 3,103 4,525 19,563

Subtotal ...... 877,620 114,698 740,358

Less: Allowance for impairment of other receivables ...... (7,478) (1,878) (9,301)

Subtotal ...... 870,142 112,820 731,057

Prepayments – Utilities and others ...... 5,288 6,865 7,618 – Prepaid business tax and other surcharges ...... 4,324 4,238 4,511

Subtotal ...... 9,612 11,103 12,129

Total ...... 879,754 123,923 743,186

Before allowance for impairment of other receivables, our other receivables and prepayments decreased by 86.9% from RMB887.2 million as of December 31, 2018 to RMB125.8 million as of December 31, 2019, and subsequently rebounded to RMB752.5 million as of December 31, 2020, primarily attributable to a decrease in amounts due from related parties from RMB798.7 million as of December 31, 2018 to RMB25.6 million as of December 31, 2019 as we collectively settled RMB773.1 million of amounts due from related parties in 2019 in preparation of Guangzhou Fuxing’s acquisition of Tianli Property. Our other receivables and prepayments subsequently increased to RMB752.5 million as of December 31, 2020, primarily dye to RMB514.8 million of cash advances that we extended to related parties, which we had collected in full as of the Latest Practicable Date. Others of our other receivables increased from RMB4.5 million as of December 31, 2019 to RMB19.6 million as of December 31, 2020, primarily attributable to a third-party payment platform that we began to use in 2020 to collect fees from customers.

Liabilities

Trade Payables

Our trade payables primarily represent our obligations to pay for goods or services that have been acquired in the ordinary course of business from related and third parties, including purchase of utilities and materials, and purchases from subcontractors.

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Our trade payables as of December 31, 2018 increased by 10.5% from RMB160.1 million to RMB176.9 million as of December 31, 2019, and further increased to RMB233.4 million as of December 31, 2020, primarily due to increases in cleaning, greening, maintenance, security and fire protection costs and procurement of material and parts in relation to our provision of property management services, which were in line with our business expansion during the Track Record Period.

The following table sets forth our trade payable turnover days for the years indicated.

For the year ended December 31, 2018 2019 2020

Average trade payables turnover days . . 34 35 38

Our average trade payables turnover days remained stable between 2018 and 2019. Our average trade payables turnover days increased to 38 days in 2020, primarily due to a slowdown in trade payables settlement as a result of the outbreak of COVID-19 in 2020.

The following table sets forth an aging analysis of our trade payables based on the invoice date as of the dates indicated.

As of December 31, 2018 2019 2020 RMB’000

Within one year ...... 147,031 166,346 217,384 – Related parties ...... 149 177 653 – Third parties ...... 146,882 166,169 216,731 One to two years ...... 9,659 4,658 8,141 – Related parties ...... 109 148 – – Third parties ...... 9,550 4,510 8,141 Two to three years ...... 1,637 3,540 3,156 – Related parties ...... – 38 – – Third parties ...... 1,637 3,502 3,156 Over three years ...... 1,756 2,385 4,735 – Related parties ...... – – – – Third parties ...... 1,756 2,385 4,735

Total ...... 160,083 176,929 233,416

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As of February 28, 2021, approximately RMB7,800, or 1.2% of our trade payables to related parties as of December 31, 2020, was settled. As of the same date, approximately RMB70.6 million, or 30.3% of our trade payables to third parties as of December 31, 2020, was settled. Our Directors confirm that we had not defaulted on payment of trade payables during the Track Record Period and up to the Latest Practicable Date.

Other Payables

Our other payables primarily consist of (i) amounts due to related parties; (ii) amounted collected on behalf of property owners, including utility fees, heating fees and trash disposal fees that we collected on behalf of customers and payable to utility and heating suppliers as well as trash disposal service providers; (iii) accrued payroll; (iv) security deposits that we collect from residents and tenants; (v) other tax payables; and (vi) others. The following table sets forth a breakdown of our other payables as of the dates indicated.

As of December 31, 2018 2019 2020 RMB’000

Amounts due to related parties ...... 956,263 38,108 494,785 Deposits...... 245,420 246,460 273,420 Accrued payroll ...... 249,453 230,460 258,263 Amounts received from property owners on items to be paid on their behalf. . . 206,165 298,696 146,720 Other tax payables ...... 44,630 43,318 32,742 Others...... 76,820 94,804 120,599

Total ...... 1,778,751 951,846 1,326,529

Our other payables decreased by 46.5% from RMB1,778.8 million as of December 31, 2018 to RMB951.8 million as of December 31, 2019, and subsequently rebounded to RMB1,326.5 million as of December 31, 2020, primarily because we collectively settled RMB918.2 million of amounts due to related parties in 2019 in preparation of Guangzhou Fuxing’s acquisition of Tianli Property.

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Contract Liabilities

We collect deposits pursuant to our service agreements before we start rendering our property management, commercial operational, value-added, and lifestyle services. This gives rise to contract liabilities at the start of each service agreement that we enter into. As time lapses and as we render our service according to the respective service agreement, we recognize revenue and reduce contract liabilities.

Our contract liabilities remained relatively stable as of December 31, 2018 and 2019, amounting to RMB235.1 million and RMB240.1 million, respectively, and increased to RMB297.4 million as of December 31, 2020, primarily due to an increase in the property management fees that were repaid for our basic property management services to residential properties as we further streamlined and promoted online prepayments on our Zizai Platform.

Lease Liabilities

We lease certain buildings for our office use and to our employees as dormitories. We record the present value of minimum lease payments we were committed to pay under the lease agreements as lease liabilities. Our lease liabilities increased significantly from RMB1.0 million as of December 31, 2018 to RMB3.5 million as of December 31, 2019 primarily due to the two new offices in Guangzhou and two new employee dormitories that we leased in 2019 as a result of our business expansion. Our lease liabilities decreased from RMB3.5 million as of December 31, 2019 to RMB2.5 million as of December 31, 2020, primarily due to an increase in value depreciation of leased properties as a result of additional offices that we leased in 2019.

Current Income Tax Liabilities

As of December 31, 2018, 2019 and 2020, our current income tax liabilities amounted to approximately RMB0.2 million, RMB7.2 million, RMB62.3 million, respectively. Current income tax liabilities as of the specified dates mainly represented the income tax payable for the year then ended according to the prevailing income tax rate.

NET CURRENT ASSETS OR LIABILITIES

The following table sets forth a breakdown of our net current assets or liabilities as of the dates indicated.

As of As of December 31, February 28, 2018 2019 2020 2021 RMB’000 (unaudited)

Current assets Trade and other receivables and prepayments ...... 1,316,511 443,803 1,230,994 975,638 Restricted cash ...... 167 142 – 108 Cash and cash equivalents.... 355,267 690,799 405,641 616,558

Total current assets ...... 1,671,945 1,134,744 1,636,635 1,592,304

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As of As of December 31, February 28, 2018 2019 2020 2021 RMB’000 (unaudited)

Current liabilities Lease liabilities...... 956 3,226 1,346 3,240 Trade and other payables .... 1,938,834 1,128,775 1,559,945 1,452,335 Current income tax liabilities . 182 7,244 62,314 47,522 Contract liabilities...... 200,300 205,524 262,550 303,953

Total current liabilities ..... 2,140,272 1,344,769 1,886,155 1,807,050

Net current liabilities ...... 468,327 210,025 249,520 214,746

We had net current liabilities as of December 31, 2018, 2019 and 2020, primarily because our trade and other payables outweighed our trade and other receivables as well as cash and cash equivalents during each period of the Track Record Period as a result of the increases in amount collected on behalf of property owners and contract liabilities during the Track Record Period, which was in line with our business expansion. We have obtained RMB310.0 million of capital injection from our shareholders and recorded net current assets as of March 31, 2021. In addition, we plan to increase our net current assets by increasing our net profit through operational efficiency and cost control enhancement. We expect to reduce our net current liabilities through (i) funds generated from our business operations as we continue to improve our profitability, (ii) reducing our trade payables, and (iii) net proceeds from the [REDACTED].

Our net current liabilities increased from RMB210.0 million as of December 31, 2019 to RMB249.5 million as of December 31, 2020, primarily due to (i) decrease in cash and cash equivalents by RMB285.2 million; and (ii) an increase in total current liabilities driven primarily by an RMB431.2 million increase in trade and other payables, an RMB55.1 million increase in current income tax liabilities, and an RMB57.0 million increase in contract liabilities, as partially offset by an RMB787.2 million increase in trade and other receivables and prepayments.

Our net current liabilities decreased from RMB249.5 million as of December 31, 2020 to RMB214.7 million as of February 28, 2021, primarily due to a decrease in trade and other receivables and prepayments by RMB255.4 million as we enhanced our collection of trade receivables from related parties, as partially offset by an increase in cash and cash equivalents by RMB210.9 million as our operations continued to improve.

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LIQUIDITY AND CAPITAL RESOURCES

Our principal use of cash has been for working capital purposes. Our main sources of liquidity have been proceeds from our business operations. In the foreseeable future, we expect these sources to continue to be our principal sources of liquidity and we may use a portion of the proceeds from the [REDACTED] to finance some of our capital requirements.

Cash Flows

The following table sets forth selected cash flow data from our combined statements of cash flows for the years indicated.

Year ended December 31, 2018 2019 2020 RMB’000

Cash flows from operating activities Cash generated from operations ...... 116,955 175,028 242,546 Interest received ...... 1,817 2,115 2,640 Interestpaid...... (61) (225) (210)

Net cash generated from operating activities ...... 118,711 176,918 244,976

Cash flows from investing activities Purchases of property, plant and equipment ...... (7,198) (13,156) (13,612) Purchase of intangible assets ...... (31) – (55) Proceeds from disposal of property, plant and equipment ...... 5 116 4 Repayments of cash advance from related parties...... 4,246 176,636 2,500 Cash advances to related parties ...... (80,566) (295,000) (514,839)

Net cash used in investing activities . . (83,544) (131,404) (526,002)

Cash flows from financing activities Capital injection from the then shareholders of the Group ...... – 295,000 – Cash advance from related parties ..... 14,436 – – Repayments of cash advance to related parties ...... – (1,075) – Principal elements of lease payments. . . (1,122) (3,907) (4,132)

Net cash generated from/(used in) financing activities ...... 13,314 290,018 (4,132) Net increase/(decrease)in cash and cash equivalents ...... 48,481 335,532 (285,158)

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Operating Activities

Cash flow from operating activities reflects (i) loss/profit before income tax adjusted for non-cash and non-operating items, such as depreciation of property, plant and equipment, and amortization of intangible assets; and (ii) movements in working capital, such as trade and other receivables and prepayments, trade and other payables, contract liabilities, and restricted cash.

In 2020, cash generated from operating activities was RMB242.5 million. Operating cash inflow before changes in working capital was RMB346.8 million, primarily attributable to profit before tax of RMB317.0 million, as adjusted by certain line items such as (i) depreciation of property, plant and equipment of RMB9.4 million; (ii) depreciation of right-of-use assets of RMB4.3 million; and (iii) allowance for impairment of trade and other receivables of RMB18.2 million, as partially offset by finance income of RMB2.6 million. Our movements in working capital primarily reflect an increase in trade and other receivables and prepayments of RMB293.2 million, as partially offset by an increase in trade and other payables of RMB131.0 million and an increase in contract liabilities of RMB57.3 million.

In 2019, cash generated from operating activities was RMB175.0 million. Operating cash inflow before changes in working capital was RMB121.7 million, primarily attributable to profit before tax of RMB85.8 million, as adjusted by certain line items such as (i) depreciation of property, plant and equipment of RMB8.0 million; (ii) depreciation of right-of-use assets of RMB4.1 million and (iii) allowance for impairment of trade and other receivables of RMB25.5 million, as partially offset by finance income of RMB2.1 million. Our movements in working capital primarily reflect (i) a decrease in trade and other receivables and prepayments of RMB98.3 million; and (ii) an increase in contract liabilities of RMB5.0 million, as partially offset by a decrease in trade and other payables of RMB50.2 million.

In 2018, cash generated from operating activities was RMB117.0 million. Operating cash inflow before changes in working capital was RMB7.9 million, primarily attributable to loss before tax of RMB13.8 million, as adjusted by certain line items such as (i) depreciation of property, plant and equipment of RMB7.2 million; and (ii) allowance for impairment of trade and other receivables of RMB14.7 million, as partially offset by finance income of RMB1.8 million. Our movements in working capital primarily reflect (i) a decrease in trade and other receivables and prepayments of RMB230.8 million; and (ii) an increase in contract liabilities of RMB23.2 million, as partially offset by a decrease in trade and other payables of RMB145.0 million.

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Investing Activities

In 2020, our net cash used in investing activities was RMB526.0 million, primarily reflecting (i) cash advances to related parties of RMB514.8 million; and (ii) purchases of property, plant and equipment of RMB13.6 million, as partially offset by repayments of cash advance from related parties of RMB2.5 million.

In 2019, our net cash used in investing activities was RMB131.4 million, primarily reflecting (i) cash advances to related parties of RMB295.0 million; and (ii) purchases of property, plant and equipment of RMB13.2 million, as partially offset by repayments of cash advance from related parties of RMB176.6 million.

In 2018, our net cash used in investing activities was RMB83.5 million, primarily reflecting (i) cash advances to related parties of RMB80.6 million; and (ii) purchases of property, plant and equipment of RMB7.2 million, as partially offset by repayments of cash advance from related parties of RMB4.2 million.

Financing Activities

In 2020, our net cash used in financing activities was RMB4.1 million, primarily reflecting principal elements of lease payments of RMB4.1 million that we made.

In 2019, our net cash generated from financing activities was RMB290.0 million, primarily reflecting capital injection from the then shareholders of the Group of RMB295.0 million, as partially offset by repayments of cash advance to related parties of RMB1.1 million and principal elements of lease payments of RMB3.9 million that we made.

In 2018, our net cash generated from financing activities was RMB13.3 million, primarily reflecting cash advance from related parties of RMB14.4 million, as partially offset by principal elements of lease payments of RMB1.1 million that we made.

Working Capital

Our Directors are of the view that, after taking into account the financial resources available to us, including our cash and cash equivalents, cash generated from operations, as well as the net proceeds of the [REDACTED], we have sufficient working capital to satisfy our requirements at present and for at least the next 12 months following the date of this Document.

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INDEBTEDNESS

Lease Liabilities

The following table sets forth our current and non-current lease liabilities as of the dates indicated.

As of As of December 31, February 28, 2018 2019 2020 2021 RMB’000 (unaudited)

Lease liabilities Current...... 956 3,226 1,346 3,240 Non-current ...... – 240 1,190 2,499

Total lease liabilities..... 956 3,466 2,536 5,739

Contingent Liabilities

During the Track Record Period, we did not have any significant contingent liabilities.

As of the Latest Practicable Date, we did not have any banking facilities, any unutilized banking facilities or any outstanding or authorized but unissued debt securities, term loans, other borrowings or indebtedness in the nature of borrowing, acceptance credits, hire purchase commitments, mortgages and charges. As of the Latest Practicable Date, we did not have any significant contingent liabilities or outstanding guarantees with respect to payment obligations to third parties.

Except as intra-group liabilities, we did not have any outstanding loan capital, debt securities, debentures, bank overdrafts, liabilities under acceptances or acceptance credits or hire purchase commitments guarantees or other material contingent liabilities or any covenant in connection therewith as of the latest date for liquidity disclosure, being the latest practicable date for the purpose of the indebtedness statement. As of the same date, we had not guaranteed the indebtedness of any Independent Third Parties. Save as otherwise disclosed above, our Directors confirm that there has been no material adverse change in our indebtedness, capital commitments and contingent liabilities since December 31, 2020 and up to the Latest Practicable Date.

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CAPITAL EXPENDITURE AND COMMITMENTS

Capital Expenditure

Our capital expenditure during the Track Record Period primarily represented expenditures incurred relating to purchase of property, plant and equipment and intangible assets. In 2018, 2019 and 2020, we incurred capital expenditures of RMB9.3 million, RMB11.7 million, and RMB14.0 million, respectively.

Our Directors estimate that our capital expenditure for 2021 will be approximately RMB656.6 million. Such estimates represent the total capital expenditure we expect to incur based on our business development plans and the contracts that we have entered into in 2021. We may adjust our business plans and the estimate total capital expenditure may also change.

Capital Commitments

During the Track Record Period, we did not have any material capital commitment.

OFF-BALANCE SHEET ARRANGEMENTS

We have not entered into any off-balance sheet arrangements or commitments to guarantee the payment obligations of any third parties and related parties. We do not have any variable interest in any uncombined entity that provides financing, liquidity, market risk or credit support to us.

SUMMARY OF KEY FINANCIAL RATIOS

The following table sets forth certain of our key financial ratios as of the dates and for the years indicated.

As of/for the year ended December 31, 2018 2019 2020

Current ratio (times)(1)...... 0.8 0.8 0.9 Liabilities to assets ratio (%)(2) ...... 119.1 107.9 109.1 Return on total assets (%)(3) ...... (0.8) 5.5 20.9 Return on equity (%)(4) ...... N/A N/A N/A

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Notes:

(1) Current ratio is calculated based on our total current assets divided by our total current liabilities as of the respective dates. (2) Liabilities to assets ratio is calculated based on our total liabilities divided by our total assets as of the respective dates, multiplied by 100%. (3) Return on total assets ratio is calculated based on our profit from continuing operations for the period divided by the average balance of our total assets at the beginning and end of the period and multiplied by 100%. (4) Return on equity ratio is calculated based on our operating profit for the period divided by the average balance of total equity at the beginning and end of the period and multiplied by 100%. Return on equity ratio is not applicable to us during the Track Record Period as our total equity was negative during the Track Record Period as a result of accumulative losses.

Current Ratio

Our current ratio remained relatively stable throughout the Track Record Period, and was 0.8, 0.8 and 0.9, respectively, as of December 31, 2018, 2019 and 2020.

Liabilities to Assets Ratio

Our liabilities to assets ratio decreased from 119.1% as of December 31, 2018 to 107.9% as of December 31, 2019, primarily due to an RMB810.1 million decrease in trade and other payables as a result of our settlement of RMB918.2 million of amounts due to related parties in 2019. Our liabilities to assets ratio remained relatively stable as of December 31, 2019 and 2020, and was 107.9% and 109.1%, respectively.

Return on Total Assets

Return on Equity

Our return on equity was not applicable as of December 31, 2018, 2019 and 2020 due to negative total equity as a result of the accumulative losses that we incurred during the Track Record Period, which were mainly attributable to (i) the relatively low property management fees and the relatively high labor cost and maintenance costs of the loss-making properties under our management; and (ii) the free property management services that we provided with respect to certain unsold property units before the Track Record Period as we provided property management services to certain properties developed by R&F Group as a functional subsidiary. For more information, see “Business – Residential Property Management Services – Basic Property Management Services to Residential Properties – Property Management Fees.”

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QUANTITATIVE AND QUALITATIVE ANALYSIS ABOUT MARKET RISK

We are, in the ordinary course of our business, exposed to various market risks, including credit risk and liquidity risk. Our exposure to these risks and the financial risk management policies and practices used by us to manage these risks are described below.

Credit Risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to us. We are primarily exposed to credit risk in relation to our trade and other receivables and cash deposits at banks. The carrying amounts of trade and other receivables and cash and cash equivalents represent our maximum exposure to credit risk in relation to financial assets.

We expect no significant credit risk associated with our trade and other receivables since we have monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, we plan to review the recoverability of our trade and other receivables at the end of each reporting period to ensure that adequate impairment losses are made for doubtful debts. With respect to our trade receivables from related parties, which are property developers, we consider the expected loss rate to be low considering their financial capacity and payment history with us. Therefore, our Directors believe that there is no significant credit risk inherent in trade receivables from them. With respect to our other receivables, which mainly comprise water and electricity charges paid by us on behalf of property owners, from whom the amount will be collected on a monthly basis, our Directors believe that there is no significant impairment risk.

We expect no significant credit risk associated with our cash deposits at banks since they are substantially deposited at state-owned banks and other medium or large-sized listed banks, and as a result our management do not expect that there will be any significant losses from non-performance by these counterparties.

Liquidity Risk

We aim to maintain sufficient cash and cash equivalents or have available funding through an adequate amount of available financing to meet our daily operation working capital requirements. Our Directors believe that there is no material liquidity risk since we monitor and maintain a level of cash and cash equivalents deemed adequate by our management to finance our operations and mitigate the effects of fluctuations in cash flows.

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RELATED PARTY TRANSACTIONS

Parties are considered to be related if one party has the ability, directly or indirectly, control the other party or exercise significant influence over the other party in making financial and operation decisions. Parties are also considered to be related if they are subject to common control. Members of key management and their close family member of us are also considered as related parties. For a detailed discussion of related party transactions, see Note 27 to the Appendix I to this Document.

Significant Related Party Transactions

During the Track Record Period, we had the following significant transactions with related parties:

Provision of Services

In 2018, 2019 and 2020, our revenue recorded for providing services to related parties amounted to RMB259.5 million, RMB370.9 million and RMB608.8 million, respectively. We derived such revenue primarily from providing residential and commercial property management services, which primarily included (i) sales office management services; (ii) preliminary planning and design consultancy services; (iii) pre-delivery cleaning and inspection services; and (iv) basic property management services to commercial properties, to R&F Group and associates as well as joint ventures of R&F Group.

Purchase of Goods and Services

In 2018, 2019 and 2020, our purchase of goods and services from related parties amounted to RMB0.6 million, RMB3.0 million and RMB3.3 million, respectively, which primarily represent the commission that we paid to R&F Group for the services of its Think In Power smart payment collection platform (思力智慧收款平台).

Addition in Right-of-Use Assets

In 2019, the value of the properties that we leased from R&F Group amounted to RMB6.2 million. In 2018 and 2020, we did not lease property from any related party.

Non-cash Transactions

During the year ended December 31, 2019, amounts due to related parties of RMB767.4 million was offset with amounts due from related parties.

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Balances with Related Parties

The table below sets forth a breakdown of our balances with related parties as of the dates indicated.

As at December 31, 2018 2019 2020 RMB’000

Trade receivables –R&FGroup...... 230,703 88,564 246,032 – Associates of R&F Group ...... 6,818 1,125 – – Joint ventures of R&F Group ...... 4,628 4,279 2,297

242,149 93,968 248,329

Other receivables (Note a) –R&FGroup...... 797,995 25,556 610,931 – Joint ventures of R&F Group ...... 725 30 43

798,720 25,586 610,974

Trade payables –R&FGroup...... 258 363 653

Other payables –R&FGroup...... 956,201 27,275 183,575 – Associates of R&F Group ...... – 353 – – Joint ventures of R&F Group ...... 62 480 910 – The Controlling Shareholders ...... – 10,000 310,300

956,263 38,108 494,785

Current lease liabilities –R&FGroup...... – 3,038 –

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Our Directors confirm that the abovementioned transactions with related parties were conducted on an arm’s length basis and on normal commercial terms, and would not distort our results of operations during the Track Record Period or impact the reflection of our future performance. Our Directors confirm that all other related party balances which are non-trade in nature have been fully settled as of the Latest Practicable Date. For details on these transactions, see Note 27 to the Accountant’s Report included in Appendix I of the Document.

DIVIDEND POLICY

DISCLOSURE PURSUANT TO RULES 13.13 TO 13.19 OF THE LISTING RULES

Except as otherwise disclosed in this Document, our Directors confirm that, as of the Latest Practicable Date, they were not aware of any circumstances that would give rise to a disclosure requirement under Rules 13.13 to Rules 13.19 of the Listing Rules.

[REDACTED] EXPENSES

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NO MATERIAL ADVERSE CHANGE

After performing sufficient due diligence work which our Directors consider appropriate and after due and careful consideration, our Directors confirm that up to the date of this Document, there has been no material adverse change in our financial or trading position since December 31, 2020 (being the date to which our Company’s latest combined audited financial results were prepared), and there has been no events since December 31, 2020 which would materially affect the information shown in the Accountant’s Report, the text of which is set out in Appendix I to this Document.

UNAUDITED PRO FORMA ADJUSTED NET TANGIBLE ASSETS

For illustrative purpose only, the following statement of unaudited pro forma adjusted net tangible assets of our Group prepared in accordance with Rule 4.29 of the Hong Kong Listing Rules is prepared to show the effect of the [REDACTED] on the combined net tangible assets of the Group as of December 31, 2020 as if the [REDACTED] had occurred on December 31, 2020 and were based on the combined net assets derived from the audited financial information of our Group as of December 31, 2020, as set out in the Accountant’s Report in Appendix I to this Document and adjusted as follows.

Audited Combined Net Unaudited Tangible Pro Forma Unaudited Pro Liabilities of Estimated Net Adjusted Net Forma Adjusted Our Group as Proceeds from Tangible Net Tangible of December 31, the Assets of Our Assets per 2020(1) [REDACTED](2) Group(3) Share(4)(5) RMB’000 RMB’000 RMB’000 RMB HK$

Based on an [REDACTED]of HK$[REDACTED] per Share...... (161,049) [REDACTED][REDACTED][REDACTED][REDACTED] Based on an [REDACTED]of HK$[REDACTED] per Share...... (161,049) [REDACTED][REDACTED][REDACTED][REDACTED]

Notes:

(1) The combined net tangible liabilities of the Group attributable to the owners of our Company as of December 31, 2020 is extracted from the Accountant’s Report set out in Appendix I to this Document, which is based on the audited combined net liabilities attributable to owners of the Company as of December 31, 2020 of approximately RMB160,728,000 with an adjustment for the intangible assets attributable to the owners of the Company as of December 31, 2020 of approximately RMB321,000.

(2) The estimated net proceeds from the [REDACTED] are based on the [REDACTED]of HK$[REDACTED] and HK$[REDACTED] per share, being the low and high ends of the stated [REDACTED] range, after deduction of the [REDACTED] and other related expenses payable by our Group and does not take into account any Shares which may be issued upon the exercise of the [REDACTED] and options which may be granted under the Share Option Scheme and may be allotted and repurchased by our Group pursuant to the general mandates granted to our Directors to issue or repurchase Shares as described in “Share Capital.”

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(3) No adjustment has been made to the unaudited pro forma adjusted net tangible assets to reflect any trading results or other transactions of our Group entered into subsequent to December 31, 2020. Had the capital injection from shareholders of RMB310,000,000 been taken into account, the unaudited pro forma adjusted combined net tangible assets per Share would have been increased to HK$[REDACTED] and HK$[REDACTED] based on the indicative [REDACTED]of HK$[REDACTED] and HK$[REDACTED].

(4) The unaudited pro forma including adjusted net tangible assets per Share are arrived at after the adjustments referred to in the preceding paragraphs and on the basis that [REDACTED] Shares are expected to be in issue following the [REDACTED], but do not take into account any Shares which may be issued upon the exercise of the [REDACTED] and options which may be granted under the Share Option Scheme and may be allotted and repurchased by our Group pursuant to the general mandates granted to our Directors to issue or repurchase Shares as described in “Share Capital.”

(5) For purposes of the estimated net proceeds of the [REDACTED] and the unaudited pro forma adjusted net tangible assets per Share are converted into Hong Kong dollars and RMB at an exchange rate of HK$1.0 to RMB[0.83797]. No representation is made that the RMB amounts have been, could have been or may be converted to Hong Kong dollars, or vice versa, at that rate.

Because of its Hypothetical nature, the unaudited pro forma financial information may not give a true picture of the financial position of the Group had the [REDACTED] been completed on December 31, 2020 or at any future dates.

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FUTURE PLANS AND PROSPECTS

See “Business – Our Business Strategies” of this Document for a detailed description of our future plans.

USE OF PROCEEDS

We intend to use such net proceeds from the [REDACTED] for the purposes and in the amounts set forth below:

• approximately [REDACTED]% of the net proceeds, or approximately HK$[REDACTED] million, will be used to expand our property management services and commercial operational services through business outreach, strategic acquisitions and equity investments. In particular, we plan to allocate:

(i) approximately [REDACTED]% of the net proceeds, or approximately HK$[REDACTED] million, in acquiring or investing in other property management companies and companies providing property management related services that can either reinforce our market leading position and presence in regional markets, or will provide synergies with our strategies. In terms of property types, in addition to residential properties, we will also focus on non-residential properties, such as commercial properties, public buildings, hospitals, and schools. In terms of geographic coverage, we will primarily focus on companies located in the Greater Bay Area, the Yangtze River Delta Region and the Bohai Economic Rim as well as other major cities. In terms of financial performance, we will primarily focus on companies with an annual revenue growth rate not less than 7.0% or an annual gross profit growth rate not less than 10.0%; and

(ii) approximately [REDACTED]% of the net proceeds, or approximately HK$[REDACTED] million, in business outreach. We plan to leverage the brand value and market recognition of “R&F”, and obtain new projects and develop new businesses as well as customers in regions with strategic importance;

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• approximately [REDACTED]% of the net proceeds, or approximately HK$[REDACTED] million, expand our value-added services, and integrate the resources in both the upstream and downstream supply chain of our industry. In particular, we plan to allocate:

(i) approximately [REDACTED]% of the net proceeds, or approximately HK$[REDACTED] million, in strategic investment in providers of value- added services with specialized businesses that are synergistic with our business, such as home furnishing, housekeeping, property brokerage, asset management, advertisement, fresh food distribution, group purchase and new retail services, to build an ecosystem of service offerings that promotes customer loyalty;

(ii) approximately [REDACTED]% of the net proceeds, or approximately HK$[REDACTED] million, in strategic investment in service providers along our upstream and downstream supply chain, such as companies that provide cleaning, security, greening and gardening, repair and maintenance, and project consultancy services; and

(iii) approximately [REDACTED]% of the net proceeds, or approximately HK$[REDACTED] million, in strengthening our service offerings concerning customers’ living and commercial activities. We plan to expand Fuwu Shangqi (富物商企) and Fulin Meijia (富鄰美家), two brands through which we offer value-added services. In addition, we plan to optimize the management and operation model of our parking spaces to generate higher revenue;

• approximately [REDACTED]% of the net proceeds, or approximately HK$[REDACTED] million, will be used to further upgrade of our information management systems. In particular, we plan to allocate:

(i) approximately [REDACTED]%, or approximately HK$[REDACTED] million, in upgrading and optimizing existing hardware as well as software systems, such as our “Zizai Platform System (自在平台系統)”, to improve our operational efficiency and support our business expansion; and

(ii) approximately [REDACTED]% of the net proceeds, or approximately HK$[REDACTED] million, in procuring and installing smart facility, such as facility empowered by artificial intelligence, and systems in the projects under our management to reduce our reliance on human judgment and improve customer satisfaction rate; and

• approximately [REDACTED]% of the net proceeds, or approximately HK$[REDACTED] million, will be used for general business operations and working capital.

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Percentage Percentage of total Amount of of total Time frame Major Categories proceeds proceeds Sub-categories proceeds Specific plans 2021 2022 2023 (HK$ in (%) millions) (%) (HK$ in millions)

Strategic [REDACTED][REDACTED] Acquisition or [REDACTED] Focus on companies that [REDACTED][REDACTED][REDACTED] acquisition, investment in other can either reinforce business property management our market leading outreach, and companies and position and presence equity companies providing in regional markets, or investments property management will provide synergies related services with our strategies, such as those with a portfolio of non- residential properties, located in the Greater Bay Area, the Yangtze River Delta Region and the Bohai Economic Rim as well as other major cities, and have an annual revenue growth rate not less than 7.0% or an annual gross profit growth rate not less than 10.0%

Business outreach [REDACTED] Leverage the brand value [REDACTED][REDACTED][REDACTED] and market recognition of “R&F”, and obtain new projects and develop new businesses as well as customers in regions with strategic importance

Expansion of value- [REDACTED][REDACTED] Strategic investment in [REDACTED] Focus on companies that [REDACTED][REDACTED][REDACTED] added services, service providers provide home and upstream and with specialized furnishing, downstream businesses that are housekeeping, supply-chain synergistic with our property brokerage, integration business asset management, advertisement, fresh food distribution, group purchase and new retail services, to build an ecosystem of service offerings that promotes customer loyalty

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Percentage Percentage of total Amount of of total Time frame Major Categories proceeds proceeds Sub-categories proceeds Specific plans 2021 2022 2023 (HK$ in (%) millions) (%) (HK$ in millions)

Strategic investment in [REDACTED] Focus on companies that [REDACTED][REDACTED][REDACTED] service providers provide cleaning, along our upstream security, greening and and downstream gardening, repair and supply chain maintenance, and project consultancy services

Strengthen our service [REDACTED] Expand Fuwu Shangqi [REDACTED][REDACTED][REDACTED] offerings concerning and Fulin Meijia, and customers’ living and optimize the commercial activities management and operation model of our parking spaces to generate higher revenue

Technological [REDACTED][REDACTED] Procurement of new [REDACTED] Upgrade our “Zizai [REDACTED][REDACTED][REDACTED] investment and upgrade of Platform System (自在 existing hardware as 平台系統)” to improve well as software our operational systems efficiency and support our business expansion

Procurement and [REDACTED] Install smart facility and [REDACTED][REDACTED][REDACTED] installation of smart systems, such as facility and systems facility empowered by artificial intelligence, in the projects under our management to reduce our reliance on human judgment and improve customer satisfaction rate

Working capital [REDACTED][REDACTED][REDACTED] We expect to have [REDACTED][REDACTED][REDACTED] and other general increasing needs for corporate working capital as a purposes result of the rapid and organic expansion as well as diversifying service offerings and property portfolio under management

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Plans for Strategic Acquisitions and Investments

As of the Latest Practicable Date, we have not identified or committed to any acquisition targets for our use of net proceeds received by our Company from the [REDACTED]. When determining the amount of approximately HK$[REDACTED] million, or [REDACTED]% of the net proceeds, allocated to potential mergers and acquisitions of and investment in other projects, property management companies and companies providing property management related services, and approximately HK$[REDACTED] million, or [REDACTED]% of the net proceeds, allocated to potential investment in companies with business lines that are complementary to our value-added services to non-property owners and community value- added services, assuming an [REDACTED] of HK$[REDACTED] per Share (being the mid-point of the indicative [REDACTED] range set forth on the cover page of this Document), we have considered (i) our goal to acquire majority equity interests of potential targets at a price-earning ratio of approximately six to 12 times; and (ii) our criteria for strategic acquisitions and investments as disclosed below. The considerations under the allocation of the net proceeds as mentioned above may be subject to changes based on market conditions.

Although we had not identified or committed to any acquisition targets for our use of net proceeds received by our Company from the [REDACTED] as of the Latest Practicable Date, we have determined the criteria for evaluating potential targets. These efforts are based on the results of research, financial due diligence and preliminary assessments and feasibility studies undertaken during the Track Record Period and up to the date of this Document.

Criteria for Strategic Acquisitions and Investments

We plan to strategically acquire or invest in property management companies that focus on both residential properties and commercial properties, such as retail properties, office buildings, serviced apartments, industrial parks and others. We plan to prioritize property management companies located in the Greater Bay Area, and other first-tier, new first-tier and second-tier cities in the coastal region of Eastern China. We plan to focus on suitable targets which: (i) have an average annual revenue growth rate of not less than 7.0%; (ii) have an average gross profit margin of not less than 10.0%; (iii) have an average net profit margin of not less than 5.0%; and (iv) have positive cash flows from operation. We will also consider other risk factors, including indebtedness, administrative penalties, outstanding legal proceedings and disputes. Based on criteria mentioned above, we preliminarily estimate that non-residential properties would account for 20.0% to 40.0% of the aggregate GFA under management of all target property management companies to be acquired or invested in by us. The criteria are subject to adjustment based on changes in the market conditions and our strategic needs.

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We also plan to strategically acquire or invest in companies that can offer services complementary to our value-added services to non-property owners and community value- added services. We plan to focus on suitable targets which: (i) already have a mature business model and a clear financial model that could be scaled up; and (ii) can provide us with the opportunities to expand into new markets, enhance our brand value and diversify our service offerings. Such companies, among others, may include providers of maintenance and repair services to elevators and other facility, advertising and media companies, real estate agents, elderly care service providers, educational service providers, home decoration service providers and insurance brokers.

With respect to the targets for our strategic acquisitions and investments, we will also consider other risk factors, including hidden liabilities, administrative penalties, outstanding legal proceedings and disputes.

The criteria are subject to adjustment based on changes in the market conditions and our strategic needs.

Implementation of Acquisition Plan

We plan to acquire or invest in quality property management companies with the property portfolio that meets our plans for strategic acquisitions and investments. We intend to primarily target non-residential property management companies that have solid market share, growth potential, profitability, and business lines are complementary to our current property portfolio under management. For more criteria for potential targets, see “– Criteria for Strategic Acquisitions and Investments” above. CIA has identified increasing market concentration in the highly competitive and fragmented PRC property management industry. See “Industry Overview – Trends in the PRC Property Management Industry – Increasing Market Concentration” in this Document. According to CIA, although approximately 80.0% of the 2019 Top 100 Property Management Companies were owned by or associated with property development companies, there were over 100,000 property management companies with a total market size of approximately RMB23.9 billion in the PRC as of December 31, 2019, as compared to around 90,000 property developers in the PRC, indicating that most property management companies are not affiliated with property developers. According to CIA, given the fragmented nature of the PRC property management industry, there is a sufficiently large number of potential targets available for our consideration that meet our criteria for acquisitions or investment. Therefore, despite the competition that we face from other market players for quality target companies, we believe we can identify and acquire suitable target companies to implement our business strategies.

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In 2019, we started an external business development team and began to expand our external business development scope by strategic acquisitions and investment during the same year. We direct our regional subsidiaries to conduct preliminary researches on the sizes, business operations, indebtedness, financial condition, and legal compliance statuses of potential acquisition and cooperation targets, and submit research reports for review and approval by our headquarters. If approved, our headquarters will instruct and supervise our regional companies to complete the bidding, contract negotiation and signing, and subsequent ramp-up processes.

Valuation Basis

We determine the amount of consideration for a potential target primarily with reference to factors such as the price to earning ratio of comparable companies and its net profit in the preceding year. Our final price range may be determined on the basis of, or adjusted depending on, the target’s size and our evaluation of its potential. In the event that the net proceeds received by our Company from the [REDACTED] are less than the capital expenditure needed, we intend to use our internal funds.

Basis and Assumptions

Our future plans and business strategies are based on the following general assumptions:

• there will be no material change in the funding requirement for each of our future plans described in this Document from the amount as estimated by our Directors;

• we will have sufficient financial resources to meet the planned capital expenditures and business development requirements during the period to which our future plans relate;

•the[REDACTED] will be completed in accordance with and as described in the section entitled “Structure and Conditions of the [REDACTED]” in this Document;

• there will be no material changes in existing accounting policies from those stated in the audited combined financial statements of our Group for the Track Record Period;

• our operations including our future plans will not be interrupted by any force majeure, unforeseeable factors, extraordinary items or economic changes in respect of inflation, interest rate and tax rate in the PRC and elsewhere;

• there will be no material changes in the bases or rates of taxation applicable to our activities;

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• we will not be materially affected by the risk factors as set out in the section headed “Risk Factors” in this Document;

• we will continue our operation including but not limited to retaining our key staff and maintaining our customers, suppliers and subcontractors in the same manner as we did during the Track Record Period;

• there will be no material change in existing laws and regulations, or other governmental policies relating to our Group and our business, or in the political or market conditions in which we operate; and

• there will be no epidemic or disasters, natural, political or otherwise, which would materially disrupt our businesses or operations.

The above allocation of the proceeds will be adjusted on a pro rata basis in the event that the [REDACTED] is fixed at a higher or lower level compared to the mid-point of the estimated [REDACTED].

If the [REDACTED] is fixed at HK$[REDACTED]per[REDACTED] (being the high end of the [REDACTED] Range stated in this Document), we will receive net proceeds of approximately HK$[REDACTED] million, after deduction of [REDACTED] and commissions and estimated expenses in connection with the [REDACTED].

If the [REDACTED] is fixed at HK$[REDACTED] per [REDACTED] (being the low end of the [REDACTED] Range stated in this Document), the net proceeds we receive will be approximately HK$[REDACTED] million, after deduction of [REDACTED] and commissions and estimated expenses in connection with the [REDACTED].

To the extent that the net proceeds are not immediately applied to the above purposes and to the extent permitted by applicable law and regulations, we intend to apply the unused net proceeds to short-term demand deposits with well-established and licensed commercial banks and financial institutions. We will make an appropriate announcement if there is any change to the above proposed use of proceeds or if any amount of the proceeds will be used for general corporate purpose.

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The following is the text of a report set out on pages I-[1] to I-[3], received from the Company’s reporting accountant, PricewaterhouseCoopers, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this document. It is prepared and addressed to the directors of the Company and to the Joint Sponsors pursuant to the requirements of HKSIR 200 Accountants’ Reports on Historical Financial Information in Investment Circulars issued by the Hong Kong Institute of Certified Public Accountants.

[Letterhead of PricewaterhouseCoopers Hong Kong] [Draft]

ACCOUNTANT’S REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE DIRECTORS OF R&F PROPERTY SERVICES GROUP COMPANY LIMITED, ABCI CAPITAL LIMITED AND CHINA INTERNATIONAL CAPITAL CORPORATION HONG KONG SECURITIES LIMITED

Introduction

We report on the historical financial information of R&F Property Services Group Company Limited (the “Company”) and its subsidiaries (together, the “Group”) set out on pages I-[4] to I-[49], which comprises the combined balance sheets as at December 31, 2018, 2019 and 2020, the company balance sheet as at December 31, 2020 and the combined statements of comprehensive income, the combined statements of changes in equity and the combined statements of cash flows for each of the years ended December 31, 2018, 2019 and 2020 (the “Track Record Period”) and a summary of significant accounting policies and other explanatory information (together, the “Historical Financial Information”). The Historical Financial Information set out on pages I-[4] to I-[49] forms an integral part of this report, which has been prepared for inclusion in the document of the Company dated [REDACTED] (the “Document”) in connection with the [REDACTED] of shares of the Company on the Main Board of The Stock Exchange of Hong Kong Limited.

Directors’ responsibility for the Historical Financial Information

The directors of the Company are responsible for the preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of presentation and preparation set out in Notes 1.3 and 2.1 to the Historical Financial Information, and for such internal control as the directors determine is necessary to enable the preparation of Historical Financial Information that is free from material misstatement, whether due to fraud or error.

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Reporting accountant’s responsibility

Our responsibility is to express an opinion on the Historical Financial Information and to report our opinion to you. We conducted our work in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 200, Accountants’ Reports on Historical Financial Information in Investment Circulars issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”). This standard requires that we comply with ethical standards and plan and perform our work to obtain reasonable assurance about whether the Historical Financial Information is free from material misstatement.

Our work involved performing procedures to obtain evidence about the amounts and disclosures in the Historical Financial Information. The procedures selected depend on the reporting accountant’s judgement, including the assessment of risks of material misstatement of the Historical Financial Information, whether due to fraud or error. In making those risk assessments, the reporting accountant considers internal control relevant to the entity’s preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of presentation and preparation set out in Notes 1.3 and 2.1 to the Historical Financial Information in order to design procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Our work also included evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the Historical Financial Information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion, the Historical Financial Information gives, for the purposes of the accountant’s report, a true and fair view of the financial position of the Company as at December 31, 2020 and the combined financial position of the Group as at December 31, 2018, 2019 and 2020 and of its combined financial performance and its combined cash flows for the Track Record Period in accordance with the basis of presentation and preparation set out in Notes 1.3 and 2.1 to the Historical Financial Information.

Report on matters under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and the Companies (Winding Up and Miscellaneous Provisions) Ordinance

Adjustments

In preparing the Historical Financial Information, no adjustments to the Underlying Financial Statements as defined on page I-[4] have been made.

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Dividends

We refer to note 14 to the Historical Financial Information which contains information about the dividends paid by the Group in respect of the Track Record Period.

No statutory financial statements for the Company

No statutory financial statements have been prepared for the Company since its date of incorporation.

[PricewaterhouseCoopers] Certified Public Accountants Hong Kong [REDACTED]

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I HISTORICAL FINANCIAL INFORMATION OF THE GROUP

Preparation of Historical Financial Information

Set out below is the historical financial information as at December 31, 2018, 2019 and 2020 and for the years then ended (the “Track Record Period”) (the “Historical Financial Information”) which forms an integral part of this accountant’s report.

The combined financial statements of the Group for the years ended December 31, 2018, 2019 and 2020, on which the Historical Financial Information is based, were audited by PricewaterhouseCoopers Zhong Tian LLP in accordance with Hong Kong Standards on Auditing issued by the HKICPA (“Underlying Financial Statements”).

The Historical Financial Information is presented in Renminbi (“RMB”) and all values are rounded to the nearest thousand (“RMB’000”) except when otherwise indicated.

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Combined statements of comprehensive income

Year ended December 31, Note 2018 2019 2020 RMB’000 RMB’000 RMB’000

Revenue 6 1,823,448 2,170,101 2,597,422 Cost of sales 6, 9 (1,552,185) (1,780,741) (1,953,253)

Gross profit 271,263 389,360 644,169 Administrative expenses 9 (272,423) (288,632) (325,067) Net impairment losses on financial assets 3.1.1 (14,696) (25,517) (18,219) Other income 7 1,167 10,846 15,643 Other losses-net 8 (818) (2,177) (1,915)

Operating (loss)/ profit (15,507) 83,880 314,611 Finance income 11 1,817 2,115 2,640 Finance costs 11 (61) (225) (210)

(Loss)/ profit before income tax (13,751) 85,770 317,041 Income tax credit/(expenses) 12 2,111 (21,940) (77,290)

(Loss)/ profit and total comprehensive (loss)/income for the year attributable to owners of the Company (11,640) 63,830 239,751

Earnings per share (expressed in RMB per share) – Basic and diluted 13 N/A N/A N/A

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Combined balance sheets

As at December 31, Note 2018 2019 2020 RMB’000 RMB’000 RMB’000

Assets Non-current assets Property, plant and equipment 15 46,303 49,743 54,202 Right-of-use assets 23 3,645 6,005 4,863 Intangible assets 16 524 376 321 Deferred income tax assets 25 101,809 86,931 64,711 Other non-current assets 1,535 1,284 760

153,816 144,339 124,857

Current assets Trade and other receivables and prepayments 18 1,316,511 443,803 1,230,994 Restricted cash 20 167 142 – Cash and cash equivalents 19 355,267 690,799 405,641

1,671,945 1,134,744 1,636,635

Total assets 1,825,761 1,279,083 1,761,492

Equity Equity attributable to owners of the Company Combined capital 21 15,000 300,000 – Reserves 22 2,500 2,500 18,930 Accumulated losses (366,809) (402,979) (179,658)

Total deficit (349,309) (100,479) (160,728)

Liabilities Non-current liabilities Lease liabilities 23 – 240 1,190 Contract liabilities 6 34,798 34,553 34,875

34,798 34,793 36,065

Current liabilities Lease liabilities 23 956 3,226 1,346 Trade and other payables 24 1,938,834 1,128,775 1,559,945 Current income tax liabilities 182 7,244 62,314 Contract liabilities 6 200,300 205,524 262,550

2,140,272 1,344,769 1,886,155

Total liabilities 2,175,070 1,379,562 1,922,220

Total equity and liabilities 1,825,761 1,279,083 1,761,492

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Balance sheet of the Company

As at December 31, Note 2020 RMB’000

Assets Current assets Cash and cash equivalents *

Total assets *

Equity Equity attributable to owners of the Company Share capital 21 * Retained earnings –

Total equity *

Total liabilities –

Total equity and liabilities *

* represent on amount less than RMB1,000

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Combined statements of changes in equity

Attributable to owners of the Company Combined Accumulated capital Reserves losses Total RMB’000 RMB’000 RMB’000 RMB’000

Balance at January 1, 2018 15,000 1,105 (353,774) (337,669)

Comprehensive income Loss for the year – – (11,640) (11,640)

Transactions with owners of the Company Appropriation to statutory reserves – 1,395 (1,395) –

Balance at December 31, 2018 15,000 2,500 (366,809) (349,309)

Balance at January 1, 2019 15,000 2,500 (366,809) (366,809)

Comprehensive income Profit for the year – – 63,830 63,830 Transactions with owners of the Company Capital contribution from the then shareholders of a group company (Note 21(c)) 295,000 – – 295,000 Acquisition of subsidiaries from Guangzhou R&F during the Reorganization (Note 21(d)) (10,000) – – (10,000) Appropriation to statutory reserves –––– Dividend declared (Note 14) – – (100,000) (100,000)

Balance at December 31, 2019 300,000 2,500 (402,979) (100,479)

Balance at January 1, 2020 300,000 2,500 (402,979) (100,479)

Comprehensive income Profit for the year – – 239,751 239,751 Transactions with owners of the Company Acquisition of subsidiaries from Guangzhou R&F during the Reorganization (Note 21(d)) (300,000) – – (300,000) Appropriation to statutory reserves – 16,430 (16,430) –

Balance at December 31, 2020 – 18,930 (179,658) (160,728)

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Combined statements of cash flows

Year ended December 31, Note 2018 2019 2020 RMB’000 RMB’000 RMB’000

Cash flows from operating activities Cash generated from operations 26(a) 116,955 175,028 242,546 Interest received 1,817 2,115 2,640 Interest paid (61) (225) (210)

Net cash generated from operating activities 118,711 176,918 244,976

Cash flows from investing activities Purchases of property, plant and equipment (7,198) (13,156) (13,612) Purchase of intangible assets (31) – (55) Proceeds from disposal of property, plant and equipment 5 116 4 Repayments of cash advance from related parties 4,246 176,636 2,500 Cash advances to related parties (80,566) (295,000) (514,839)

Net cash used in investing activities (83,544) (131,404) (526,002)

Cash flows from financing activities Capital injection from the then shareholders of the Group 21(c) – 295,000 – Cash advance from related parties 26(c) 14,436 – – Repayments of cash advance to related parties 26(c) – (1,075) – Principal elements of lease payments 26(c) (1,122) (3,907) (4,132)

Net cash generated from/(used in) financing activities 13,314 290,018 (4,132)

Net increase/(decrease) in cash and cash equivalents 48,481 335,532 (285,158) Cash and cash equivalents at beginning of year 306,786 355,267 690,799

Cash and cash equivalents at end of year 355,267 690,799 405,641

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II NOTES TO THE HISTORICAL FINANCIAL INFORMATION

1 General information, reorganization and basis of presentation

1.1 General information

R&F Property Services Group Company Limited (the “Company”) was incorporated on December 24, 2020 under the laws of the Cayman Islands with limited liability. The address of the Company’s registered office is at the office of Walkers Corporate Limited, Cayman Corporate Centre, 190 Elgin Avenue, George Town, Grand Cayman KY1-9008, Cayman Island.

The Company is an investment holding company and its subsidiaries (together, the “Group”) are principally engaged in the provision of residential property management services and commercial property management services in the People’s Republic of China (the “PRC”) (the “[REDACTED] Business”).

The [REDACTED] Business have been jointly controlled by Mr. Zhang Li (“Mr. Zhang”) and Mr. Li Sze Lim (“Mr. Li” and collectively with Mr. Zhang, the “Controlling Shareholders”) throughout the Track Record Period.

1.2 Reorganization

Prior to the incorporation of the Company and the completion of the reorganization as described below (the “Reorganization”), the [REDACTED] Business was operated through Guangzhou Tianli Property Management Co., Ltd. (“Guangzhou Tianli”) and its subsidiaries (the “Guangzhou Tianli Group”), Datong Hengfu Property Management Co., Ltd. (“Datong Hengfu”) and Tianjin Huaxin Property Management Co., Ltd (“Tianjin Huaxin”) (collectively, the “Operating Entities”) in the PRC during the Track Record Period.

On December 11, 2019, Guangzhou Fuxing Investment Consultation Co., Ltd (“Guangzhou Fuxing”) was established in the PRC by Mr. Li and Mr. Zhang, each holds 50% of its shares.

On December 23, 2019, December 30, 2019 and April 9, 2020 respectively, Guangzhou Fuxing acquired 100% equity interests of Datong Hengfu, Tianjin Huaxin and Guangzhou Tianli Group, from Guangzhou R&F Property Co., Ltd (“Guangzhou R&F”) at cash consideration of RMB5,000,000, RMB5,000,000, and RMB300,000,000 respectively. Guangzhou R&F is a limited liability company incorporated in the PRC and its shares have been listed on The Main Board of Stock Exchange of Hong Kong since 14 July 2005. Mr. Li and Mr. Zhang are the substantial shareholders of Guangzhou R&F. Guangzhou R&F and its subsidiaries are referred to as Guangzhou R&F Group.

For the purpose of preparing for the [REDACTED] of the Company’s shares on the Main Board of the Stock Exchange of Hong Kong Limited, the Group underwent a reorganization pursuant to which the [REDACTED] Business were transferred to the Company. The Reorganization involved the following:

(a) On September 29, 2020, October 12, 2020 and October 16, 2020, Virtuous Charm Limited (“Virtuous Charm”), Prime Elegance Holdings Limited (“Prime Elegance”) and Jade Concord Enterprises Limited (“Jade Concord”) were incorporated in the British Virgin Islands (“BVI”) with limited liability, respectively. On November 4, 2020, 100 ordinary shares of each of Virtuous Charm, Prime Elegance and Jade Concord were allotted to Mr. Li.

(b) On August 26, 2020, October 16, 2020 and October 16, 2020, Active Strength Holdings Limited (“Active Strength”), Sun Arise Holdings Limited (“Sun Arise”) and Grand Favour Holdings Limited (“Grand Favour”) were incorporated in BVI with limited liability, respectively. On November 4, 2020, 100 ordinary shares of each of Active Strength, Sun Arise and Grand Favour were allotted to Mr. Zhang.

(c) On December 24, 2020, the Company was incorporated in the Cayman Islands with an authorised share capital of HKD380,000 divided into 38,000,000 ordinary shares of HKD0.01 each. Upon the incorporation of the Company, one share each was issued at par to an independent initial subscriber, which was transferred to Sun Arise on December 24, 2020. On the same day, one share was issued and allotted at par to each of Virtuous Charm, Prime Elegance, Jade Concord, Active Strength and Grand Favour. Upon completion of such issue and allotment, the Company became owned as to approximately 16.67% by each of Sun Arise, Virtuous Charm, Prime Elegance, Jade Concord, Active Strength and Grand Favour.

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(d) On October 19, 2020, Wealth Best Global Limited (“Wealth Best Global”) was incorporated in the BVI with limited liability and is authorized to issue a maximum of 50,000 ordinary shares with a par value of US$1.00. On January 22, 2021, 100 shares of Wealth Best Global was issued and allotted at par to our Company. Upon completion of such issue and allotment, Wealth Best Global became wholly owned by the Company.

(e) On February 9, 2021, R&F Property Services Group HK Company Limited (“R&F Property Services HK”) was incorporated in Hong Kong with limited liability. As of the date of incorporation, 10,000 ordinary shares were issued to Wealth Best Global at a subscription price of HK$10,000. Upon completion of such issue, R&F Property Services HK became wholly owned by Wealth Best Global.

(f) On April 14, 2021, R&F Property Services HK acquired the entire equity interest of Guangzhou Fuxing from Mr. Li and Mr. Zhang at a total consideration of RMB310,000,000. In consideration of such acquisition, the Company issued (i) 500 shares to Jade Concord, a company wholly owned by Mr. Li, and (ii) 500 shares to Grand Favour, a company wholly owned by Mr. Zhang. Upon completion of the acquisition, Guangzhou Fuxing became wholly owned by R&F Property Services HK.

Upon completion of the Reorganization, the Company became the holding company of the Operating Entities engaged in the [REDACTED] Business.

Particulars of all subsidiaries of the Group as at December 31, 2018, 2019 and 2020 are set out as below.

Country/place Principal and date of Registered/ Attributable equity interest of the Group activities/ incorporation/ issued and December 31, As at date of place of Company name establishment paid-up capital 2018 2019 2020 this report operation Note

Directly owned: Wealth Best Global BVI, October 19, USD50,000/ N/A N/A N/A [100%] Investment (ii) Limited 2020 USD100 holding in BVI Indirectly owned: R&F Property Services Hong Kong, HK$10,000/ N/A N/A N/A [100%] Investment (ii) HK Company February 9, HK$10,000 holding in Limited 2021 Hong Kong Guangzhou Fuxing The PRC, RMB310,000,000/ N/A 100% 100% [100%] Investment (ii) Investment December 11, RMB Nil holding in PRC Consulting Co., 2019 Ltd.* 廣州富星投資諮詢有限公司 Guangzhou Tianli The PRC, RMB5,000,000/ 100% 100% 100% [100%] Property (i) Property December 10, RMB5,000,000 management Management 1997 services in PRC Development Co., Ltd.* 廣州天力物業發展有限公司 Beijing Hengfu The PRC, RMB5,000,000/ 100% 100% 100% [100%] Property (ii), Property Services December 11, RMB5,000,000 management (iii) Co., Ltd.* 北京恆富 2002 services in PRC 物業服務有限公司 Datong Hengfu The PRC, RMB5,000,000/ 100% 100% 100% [100%] Property (ii) Property Services December 20, RMB5,000,000 management Co., Ltd.* 大同恆富 2012 services in PRC 物業服務有限公司 Tianjin Huaxin The PRC, RMB5,000,000/ 100% 100% 100% [100%] Property (ii) Property April 23, 2004 RMB5,000,000 management Management Co., services in PRC Ltd.* 天津華信物業管理有限公司

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Guangzhou Fulin The PRC, RMB50,000,000/ N/A N/A 100% [100%] Property (ii), Commercial June 15, 2020 RMB50,000,000 management (iii) Operation Co., Ltd.* services in PRC 廣州富鄰商業運營有限公司 Hangzhou Fuli The PRC, RMB1,000,000/ N/A 100% 100% [100%] Property (ii), Commercial Service November 22, RMB1,000,000 management (iii) Co., Ltd.* 杭州富力 2018 services in PRC 商業服務有限公司 Minhou Yueshanhu The PRC, RMB500,000/ N/A 100% 100% [100%] Property (ii), Property Co. Ltd.* October 29, RMB500,000 management (iii) 閩侯縣悅山湖物業有 2019 services in PRC 限公司 Urumqi Jifu Property The PRC, RMB5,000,000/ 100% 100% 100% [100%] Property (ii), Service Co. Ltd.* 烏 August 10, RMB5,000,000 management (iii) 魯木齊極富物業服務 2018 services in PRC 有限公司 Guangzhou Junxi The PRC, RMB500,000/ 100% 100% 100% [100%] Property (ii), Property August 13, RMB500,000 management (iii) Management Co., 2007 services in PRC Ltd.* 廣州市駿熹物業管理有限公司 Guangzhou Fuyun The PRC, RMB500,000/ N/A N/A 100% [100%] Property (ii), Property Service Co. September 26, RMB500,000 management (iii) Ltd.* 廣州富雲物業 2020 services in PRC 服務有限公司 Guangzhou Fubo The PRC, RMB500,000/ N/A N/A 100% [100%] Property (ii), Property Service August 19, RMB500,000 management (iii) Co., Ltd.* 廣州富博 2020 services in PRC 物業服務有限公司 Guangzhou Fuyao The PRC, RMB500,000/ N/A N/A 100% [100%] Property (ii), Property Service August 12, RMB500,000 management (iii) Co., Ltd.* 廣州富耀 2020 services in PRC 物業服務有限公司 Beijing Hengfu The PRC, RMB1,000,000/ 100% 100% 100% [100%] Operation of (ii), Leisure Club Co., July 10, 2014 RMB1,000,000 recreation club (iii) Ltd.* 北京恆富休閒 in PRC 俱樂部有限公司 Longmen Junxi The PRC, RMB10,000,000/ 100% 100% 100% [100%] Construction (ii), Investment Co. August 9, 2012 RMB10,000,000 services in PRC (iii) Ltd.* 龍門縣駿熹投資有限公司 Lanzhou Qifu Property The PRC, RMB5,000,000/ N/A N/A 100% [100%] Property (ii), Service Co. Ltd.* 蘭 September 11, RMB5,000,000 management (iii) 州啟富物業服務有限 2020 services in PRC 公司

* The English name of the subsidiaries represents the best effort by the management of the Group in translating their Chinese names as they do not have an official English name.

(i) The statutory financial statements of the company for the year ended December 31, 2019 were prepared in accordance with Chinese accounting standards and audited by Shu Lun Pan Certified Public Accountants LLP. No audited financial statements were issued for the company for the year ended December 31. 2018 and 2020.

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(ii) No audited financial statements were issued for these companies as they are either newly incorporated or not required to issue audited financial statements under the statutory requirements of their respective places of incorporation.

(iii) These entities are wholly-owned subsidiaries of Guangzhou Tianli.

1.3 Basis of presentation

Immediately prior to and after the Reorganization, the [REDACTED] Business is conducted through the Operating Entities. Pursuant to the Reorganization, the [REDACTED] Business are transferred to and held by Guangzhou Fuxing, which is an indirectly wholly owned subsidiary of the Company. The Company has not been involved in any other business prior to the Reorganization and do not meet the definition of a business. The steps as described in Note 1.2 above are merely a capital reorganization of the [REDACTED] Business and did not change the business substance and management of the [REDACTED] Business conducted through the Operating Entities.

Accordingly, the Group resulting from the Reorganization is regarded as a continuation of the [REDACTED] Business and, for the purpose of this report, the Historical Financial Information has been prepared and presented as a continuation of the combined financial statements of the Operating Entities, with the assets and liabilities of the Group recognised and measured at the carrying amounts of the [REDACTED] Business as recorded in the combined financial statements of the Operating Entities for all periods presented.

2 Summary of significant accounting policies

This note provides a list of the significant accounting policies adopted in the preparation of these combined financial statements. These policies have been consistently applied to the Track Record Period presented, unless otherwise stated.

2.1 Basis of preparation

The Historical Financial Information has been prepared in accordance with the Hong Kong Financial Reporting Standards (“HKFRS”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”). The Historical Financial Information has been prepared under the historical cost convention.

The preparation of Historical Financial Information in conformity with HKFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Historical Financial Information are disclosed in Note 4.

All effective standards, amendments to standards and interpretations, including but not limited to HKFRS 9 Financial Instruments, HKFRS 15 Revenue from Contracts with Customers and HKFRS 16 Lease which are mandatory for the financial year beginning on or before January 1, 2020, are retrospectively and consistently applied to the Group throughout the Track Record Period.

Standards and amendments that have been issued but not yet effective for the Track Record Period and not been early adopted by the Group are as follows:

Effective for annual periods beginning on or after

Amendments to HKFRS 16 COVID-19 related rent concession June 1, 2020 Amendments to HKAS 39, Interest rate benchmark reform – Phase 2 January 1, 2021 HKFRS 4, HKFRS 7, HKFRS 9 and HKFRS 16 Amendments to HKFRS 3 Update reference to the conceptual framework January 1, 2022 Amendments to HKAS 16 Proceeds before intended use January 1, 2022 Amendments to HKAS 37 Onerous contracts – cost of fulfilling a contract January 1, 2022 Annual improvements Annual improvements to HKFRS standards January 1, 2022 2018-2020 cycle

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Effective for annual periods beginning on or after

Amendments to Accounting Merger accounting for common control January 1, 2022 Guideline 5 combinations Amendments to HKAS 1 Classification of liabilities as current or January 1, 2023 non-current HKFRS 17 Insurance contract January 1, 2023 HK Interpretation 5 Classification by the borrower of a term loan that January 1, 2023 contains a repayment on demand clause Amendments to HKFRS 10 Sale or contribution of assets between an investor To be determined and HKAS 28 and its associate or joint venture

The Group has already commenced an assessment of the impact of these new or revised standards and amendments. According to the preliminary assessment made by the Group, no significant impact on the Group’s financial statements is expected when they become effective.

2.2 Going concern

The financial statements have been prepared on the basis that the Group will continue as a going concern.

As at December 31, 2020, the Group’s total liabilities exceeded its total assets by RMB160,728,000. At the same date, its current liabilities exceeded its current assets by RMB249,520,000. Included in the current liabilities as at December 31, 2020, there were payables due to the Controlling Shareholders for the acquisition consideration of the Operating Entities of RMB310,000,000 paid by the Controlling Shareholders on behalf of the Group.

On March 30, 2021, the Controlling Shareholders injected capital of RMB310,000,000 to the Group (the “Capital Injection”) in cash to finance the Group’s settlement of its amount due to the Controlling Shareholders of RMB310,000,000 on the same date. In addition, the Group also received cash of RMB524,402,000 in relation to the settlement of amount due from related parties during the first quarter of 2021.

The Directors of the Company have reviewed the Group’s cash flows projections prepared by management, which cover a period of not less than twelve months from December 31, 2020. The Directors are of the opinion that, taking into account the Capital Injection, the subsequent settlement of amount due from related parties, the anticipated cash flows generated from the Group’s operations and the possible changes in its operating performance, the Group will have sufficient financial resources to fulfil its financial obligations as and when they fall due in the coming twelve months from December 31, 2020. Accordingly, the combined financial statements have been prepared on a going concern basis.

2.3 Principles of consolidation and equity accounting

Subsidiaries

Subsidiaries are all entities (including a structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations by the Group (refer to Note 2.4).

Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

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2.4 Business combinations

Except for the Reorganization, the acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:

• fair values of the assets transferred

• liabilities incurred to the former owners of the acquired business

• equity interests issued by the Group

• fair value of any asset or liability resulting from a contingent consideration arrangement, and

• fair value of any pre-existing equity interest in the subsidiary.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.

Acquisition-related costs are expensed as incurred.

The excess of the consideration transferred, amount of any non-controlling interest in the acquired entity, and acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions. Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in profit or loss.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognised in profit or loss.

2.5 Separate financial statements

Investments in subsidiaries are accounted for at cost less impairment. Cost includes direct attributable costs of investment. The results of subsidiaries are accounted for by the Company on the basis of dividend received and receivable.

Impairment testing of the investments in subsidiaries is required upon receiving a dividend from these investments if the dividend exceeds the total comprehensive income of the subsidiary in the period the dividend is declared or if the carrying amount of the investment in the separate financial statements exceeds the carrying amount in the consolidated financial statements of the investee’s net assets including goodwill.

2.6 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (the “CODM”). The CODM who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the executive directors that makes strategic decisions.

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2.7 Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). Historical Financial Information are presented in RMB, which is the Company’s functional and presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates are generally recognised in profit or loss.

Foreign exchange gains and losses that relate to borrowings are presented in the combined statements of comprehensive income within finance costs. All other foreign exchange gains and losses are presented in the combined statements of comprehensive income on a net basis within other losses.

2.8 Property, plant and equipment

Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.

Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives as follows:

– Buildings 30 years – Furniture, fixtures and equipment 2-10 years – Motor vehicles 3-6 years – Machinery 2-10 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount. These are recognised within “other losses – net” in the combined statements of comprehensive income.

2.9 Intangible assets

Computer software and other intangible assets

Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives of five years on a straight line basis.

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2.10 Impairment of non-financial assets

Assets that are subject to depreciation or amortisation are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

2.11 Investments and other financial assets

(a) Classification

The Group classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and

• those to be measured at amortised cost.

The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.

The Group reclassifies debt investments when and only when its business model for managing those assets changes.

(b) Recognition and derecognition

Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Debt instruments

Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow characteristics of the asset. The Group only held debt instruments classified as financial assets at amortised costs.

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. A gain or loss on a debt investment that is subsequently measured at amortised cost and is not part of a hedging relationship is recognised in the combined statement of comprehensive income when the asset is derecognised or impaired. Finance income from these financial assets is included in finance income using the effective interest rate method. Impairment losses are presented as separate line item in the combined statements of comprehensive income.

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(d) Impairment

The Group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

Expected credit losses are a probability-weighted estimate of credit losses (i.e. the present value of all cash shortfalls) over the expected life of the financial assets.

For trade receivables, the Group applies the simplified approach permitted by HKFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the assets. The provision matrix is determined based on historical observed default rates over the expected life of the trade receivables with similar credit risk characteristics and is adjusted for forward-looking estimates. At every reporting date the historical observed default rates are updated and changes in the forward-looking estimates are analysed.

Impairment on other receivables from third parties and related parties are measured as either 12-month expected credit losses or lifetime expected credit losses, depending on whether there has been a significant increase in credit risk since initial recognition. If a significant increase in credit risk of a receivable has occurred since initial recognition, then impairment is measured as lifetime expected credit losses.

2.12 Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where the Group currently has a legally enforceable right to offset the recognised amounts, and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

2.13 Trade and other receivables

Trade receivables are amounts due from customers for services performed in the ordinary course of business. If collection of trade and other receivables is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Trade and other receivables are recognised initially at the amount of consideration that is unconditional unless they contain significant financing components, when they are recognised at fair value. The Group holds the trade and other receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method. See Note 18 for further information about the Group’s accounting for trade and other receivables and Note 3.1 for a description of the Group’s impairment policies.

2.14 Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand and deposits held at call with financial institutions.

2.15 Share capital

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

2.16 Trade and other payables

Trade and other payables represent liabilities for goods or services that have been acquired in the ordinary course of business from suppliers and amounts to be repaid from the Group to its counterparties. These amounts are classified as current liabilities if payment is due within 12 months or less. If not, they are presented as non-current liabilities.

Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

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2.17 Current and deferred income tax

The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

(a) Current income tax

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

(b) Deferred income tax

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the combined financial statements. However, deferred income tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.

Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred income tax assets and liabilities are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current income tax assets and liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

2.18 Employee benefits

(a) Pension obligations

The Group only operate defined contribution pension plans. In accordance with the rules and regulations in the PRC, the PRC based employees of the Group participate in various defined contribution retirement benefit plans organised by the relevant municipal and provincial governments in the PRC under which the Group and the PRC based employees are required to make monthly contributions to these plans calculated as a percentage of the employees’ salaries. The municipal and provincial governments undertake to assume the retirement benefit obligations of all existing and future retired PRC based employees’ payable under the plans described above. Other than the monthly contributions, the Group has no further obligation for the payment of retirement and other post-retirement benefits of its employees. The assets of these plans are held separately from those of the Group in independently administrated funds managed by the governments.

The Group’s contributions to the defined contribution retirement scheme are expensed as incurred.

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(b) Housing funds, medical insurances and other social insurances

Employees of the Group in the PRC are entitled to participate in various government-supervised housing funds, medical insurances and other social insurance plan. The Group contributes on a monthly basis to these funds based on certain percentages of the salaries of the employees, subject to certain ceiling. The Group’s liability in respect of these funds is limited to the contributions payable in each year. Contributions to the housing funds, medical insurances and other social insurances are expensed as incurred.

Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits at the earlier of the following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring that is within the scope of HKAS 37 and involves the payment of termination benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.

(d) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits and accumulating sick leave that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the combined balance sheets.

2.19 Provisions

Provisions for legal claims, service warranties and make good obligations are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.

2.20 Revenue recognition

The Group is principally engaged in the provision of residential property management services and commercial property management services. Revenue is recognised when the control of services or goods is transferred to the customer. Depending on the terms of the contracts and the laws that apply to the contract, control of services or goods may be transferred over time or at a point in time. The Group distinguishes whether the Group is a principal or an agent in the transactions with its customers. When the Group is acting as a principal, the associated revenue is recognised in gross amount.

If contracts involve the sale of multiple services, the transaction price allocated to each performance obligation based on their relative stand-alone selling prices. If the stand-alone selling prices are not directly observable, they are estimated based on expected cost plus a margin or adjusted market assessment approach, depending on the availability of observable information.

When either party to a contract has performed, the Group presents the contract in the balance sheet as a contract asset or a contract liability, depending on the relationship between the Group’s performance and the customer’s payment.

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A contract asset is the Group’s right to consideration in exchange for services that the Group has transferred to a customer.

If a customer pays consideration before the Group transfers services to the customer, the Group presents the contract as a contract liability when the payment is received. A contract liability is the Group’s obligation to transfer services to a customer for which the Group has received consideration from the customer.

A receivable is recorded when the Group has an unconditional right to consideration. A right to consideration is unconditional if only the passage of time is required before payment of that consideration is due.

Incremental costs incurred to obtain a contact, if recoverable, are capitalised and presented as assets and subsequently amortised when the related revenue is recognised.

When the difference between the transfer of the promised goods or services to customer and the payment by the customer is considered significant and implied financing components contained in certain contracts, the Group adjust the transaction price for the time value of money.

(a) Residential property management services

Residential property management services comprise: (i) basic property management services to residential properties; (ii) value-added services to non-property owners; and (iii) community value-added services.

For property management services, the Group bills a fixed amount for services provided on a monthly basis and recognises as revenue in the amount to which the Group has a right to bill and that corresponds directly with the value of performance completed. The Group primarily generate revenue from property management services income from properties managed under lump sum basis, the Group entitles to revenue at the value of property managements services fee received or receivable.

Value-added services to non-property owners are recognised as revenue over time when services are rendered and mainly include (i) preliminary planning and design consultancy services in which the Group advise on various stages of property developers’ business operations from a property management perspective are billed on monthly basis; (ii) pre-delivery property inspection and cleaning services to non-property developers; and (iii) sales office management services in which the Group provides property management services to property developers’ sales offices and show flats are calculated on the basis of relevant actual costs incurred for the services provided plus a mark-up; and (iv) other services requested by the non-property owners.

Community value-added services revenue mainly include (i) home living services, in which the Group primarily helps property owners and residents with daily house cleaning, decoration, furnishing and move-in services and repair and maintenance services are recognised as revenue when such services are rendered; and (ii) community asset management services, in which the Group assist property owners in selling and renting out their properties and help property owners to clean and maintain their vacant properties are recognised as revenue when such services are rendered; and (iii) recreation center operation services, in which the Group operates certain facilities within the properties under our management to satisfy our residents’ sports and recreational needs are recognised when the relevant services are rendered; and (iv) community living services, in which the Group primarily provides group purchase facilitation services and ticketing agency services are recognised as revenue when such services are rendered; and (v) fresh food purchase and delivery services, revenue from provision of food purchase and delivery services are recognized at a point in time when the food and beverage are delivered to the customers.

(b) Commercial property management services

Commercial property management services comprise: (i) basic property management services to commercial properties; (ii) commercial operational and value-added services.

Commercial property management services, primarily including security services, cleaning and greening services, and repair and maintenance services, are charged on a lump sum basis. The Group bills a fixed amount for services provided on a monthly basis and recognizes it as revenue in the amount to which the Group has a right to invoice and that corresponds directly with the value of performance completed.

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Commercial operational and value-added services mainly include (i) tenant sourcing services, in which the Group helps property owners identify and solicit target tenants, arrange the signing of tenancy agreements are recognised as revenue when such services are rendered; (ii) commercial property transaction assistance services, in which the Group assists the property owners and property purchasers in selling and buying commercial properties are recognised as revenue when such services are rendered; (iii) special cleaning and greening services, in which the Group provides special cleaning and greening services to tenants as requested are recognised when the relevant services are rendered; (iv) furnishing and decoration services, in which the Group assists property owners and tenants in furnishing and decoration are recognised when the relevant services are rendered; (v) conference reception services, in which the Group provides conference room booking and hourly leasing, supply purchasing, conference venue preparation, conference hosting and reception services when requested are recognised as revenue when such services are rendered.

2.21 Finance income

Interest income is presented as finance income where it is earned from financial assets that are held for cash management purposes. Any other interest income is included in other income.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for financial assets that subsequently become credit-impaired. For credit-impaired financial assets the effective interest rate is applied to the net carrying amount of the financial asset (after deduction of the loss allowance).

2.22 Leases

A lease is recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group.

Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices.

Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include:

• fixed payments (including in-substance fixed payments), less any lease incentives receivable;

• variable lease payments that are based on an index or a rate;

• amounts expected to be payable by the lessee under residual value guarantees;

• the exercise price of an extension option if the lessee is reasonably certain to exercise that option; and

• payment of penalties for terminating of the lease, if the lease term reflects the lessee exercising that option

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The lease payments are discounted using the interest rate implicit in the lease, if that rate can be determined, or the Group’s incremental borrowing rate.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

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Right-of-use assets are measured at cost comprising the following:

• the amount of the initial measurement of the lease liability;

• any lease payments made at or before the commencement date less any lease incentives received;

• any initial direct cost, and;

• restoration costs

• payments of penalties for terminating the lease, if the lease term reflects the group exercising that option.

Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.

Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets mainly comprise the lease of printer.

2.23 Dividend distribution

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the Company, on or before the end of the reporting period but not distributed at the end of the reporting period.

2.24 Government grants

Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions.

Government grants relating to costs are deferred and recognised in the combined statements of comprehensive income over the period necessary to match them with the costs that they are intended to compensate.

3 Financial risk management

The Group’s activities expose it to a variety of financial risks: credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.

3.1 Financial risk factors

3.1.1 Credit risk

The Group is exposed to credit risk in relation to its trade and other receivables and cash deposits at banks. The carrying amounts of trade and other receivables, cash and cash equivalents and restricted cash represent the Group’s maximum exposure to credit risk in relation to financial assets.

(i) Risk management

For trade and other receivables, the management of the Group has monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverability of these receivables at the end of each reporting period to ensure that adequate impairment losses are made for doubtful debts.

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(ii) Impairment

The Group considers the probability of default whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the Group compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking information. Especially the following indicators are incorporated:

• internal credit rating

• external credit rating

• actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the borrower’s ability to meet its obligations

• actual or expected significant changes in the operating results of the borrower

• significant changes in the expected performance and behavior of the borrowers, including changes in the payment status of borrowers and changes in the operating results of the borrowers.

Financial assets are written off when there is no reasonable expectation of recovery.

A summary of the assumptions underpinning the Group’s expected credit loss model is as follows:

Basis for recognition of Category Group definition of category expected credit loss provision

Performing Customers have a low risk of default 12 months expected losses. and a strong capacity to meet Where the expected lifetime of contractual cash flows an asset is less than 12 months, expected losses are measured at its expected lifetime

Underperforming Receivables for which there is a Lifetime expected losses significant increase in credit risk; as significant increase in credit risk is presumed if interest and/or principal repayments are 30 days past due

Non-performing Interest and/or principal repayments Lifetime expected losses are 90 days past due

The Group accounts for its credit risk by appropriately providing for expected credit losses on a timely basis. In calculating the expected credit loss rates, the Group considers historical loss rates for each category of receivables and adjusts for forward looking macroeconomic data. Apart from trade receivables due from property developers, the Group has large number of customers and there was no concentration of credit risk.

Cash deposits at banks

The Group expects that there is no significant credit risk associated with cash deposits at banks since they are substantially deposited at state-owned banks and other medium or large-sized listed banks. Management does not expect that there will be any significant losses from non-performance by these counterparties.

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Trade receivables

The Group assessed that the expected loss rate of trade receivable from related parties, which are property developers, was low considering their financial capacity and payment history with the Group. The directors believe that there is no significant credit risk inherent in trade receivables from them.

The Group applies the simplified approach to provide for expected credit losses (“ECL”) prescribed by HKFRS 9, which permits the use of the lifetime expected loss provision for trade receivables. To measure the ECL, trade receivables due from third parties have been grouped based on shared credit risk characteristics and the aging. The ECL also incorporate forward looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. The Group has identified the industrial production, merchandise imports and consumer price index to be the most relevant factors, and accordingly adjusts the historical loss rates based on expected changes in these factors.

Group 1: Trade receivables due from third parties arising from resident properties

Group 2: Trade receivables due from third parties arising from non-resident properties

As at December 31, 2018, 2019 and 2020, the loss allowance provision for the trade receivables was determined as follows. The expected credit losses below also incorporated forward looking information.

Up to 1to 2to 3to 4to Over 1 year 2 years 3 years 4 years 5 years 5 years Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Trade receivables (excluding trade receivables from related parties) (Group 1) At December 31, 2018 Expected loss rate 12% 24% 34% 53% 77% 100% Gross carrying amount 106,161 46,014 28,679 23,325 12,709 18,772 235,660 Loss allowance provision 12,966 10,939 9,750 12,359 9,723 18,772 74,509

At December 31, 2019 Expected loss rate 14% 28% 43% 62% 76% 100% Gross carrying amount 122,013 59,898 30,759 22,855 19,575 20,861 275,961 Loss allowance provision 17,563 16,728 13,132 14,265 14,956 20,861 97,505

At December 31, 2020 Expected loss rate 10% 27% 45% 71% 83% 100% Gross carrying amount 119,249 71,414 37,804 17,195 13,700 25,710 285,072 Loss allowance provision 12,370 19,130 16,933 12,191 11,430 25,710 97,764

Up to 1to 2to 3to 4to Over 1 year 2 years 3 years 4 years 5 years 5 years Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Trade receivables (excluding trade receivables from related parties) (Group 2) At December 31, 2018 Expected loss rate 10% 31% 64% 82% 87% 100% Gross carrying amount 30,585 7,837 4,839 2,558 1,990 1,737 49,546 Loss allowance provision 3,207 2,440 3,080 2,099 1,738 1,737 14,301

At December 31, 2019 Expected loss rate 10% 27% 48% 68% 85% 100% Gross carrying amount 38,499 12,478 4,751 3,691 1,929 2,249 63,597 Loss allowance provision 3,753 3,350 2,298 2,507 1,634 2,249 15,791

At December 31, 2020 Expected loss rate 7% 24% 43% 54% 87% 100% Gross carrying amount 41,266 13,735 7,283 3,313 2,211 2,074 69,882 Loss allowance provision 2,790 3,274 3,124 1,794 1,926 2,074 14,982

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As at December 31, 2018, 2019 and 2020, the ECL rate was 0.74%, 0.37% and 1.10% for the trade receivables from related parties. The loss allowance provision as at December 31, 2018, 2019 and 2020 was RMB1,788,000, RMB350,000 and RMB2,729,000.

Trade receivables with aging over six years with known insolvencies are written off when there is no reasonable expectation of recovery. Indicators of insolvencies include, amongst others, the failure of a debtor in agreeing a repayment plan with the Group, and a failure to make contractual payments.

Other receivables

The Group uses the expected credit loss model above to determine the expected loss provision for other receivables. As at December 31, 2018, 2019 and 2020, the Group has assessed the expected credit loss for other receivables for each category.

As at December 31, 2018, 2019 and 2020, the Group has assessed that there is no significant increase of credit risk for other receivables. Thus, the Group used the 12 months expected credit losses model and provided for expected credit loss provision against other receivables as follows:

Carrying amount Gross Loss (net of Expected carrying allowance impairment Category loss rate amount provision provision) RMB’000 RMB’000 RMB’000

At December 31, 2018 Amounts due from related parties Stage one 0.74% 798,720 (5,899) 792,821 Others Stage one 2% 78,900 (1,579) 77,321

At December 31, 2019 Amounts due from related parties Stage one 0.37% 25,586 (95) 25,491 Others Stage one 2% 89,112 (1,783) 87,329

At December 31, 2020 Amounts due from related parties Stage one 1.10% 610,974 (6,713) 604,261 Others Stage one 2% 129,384 (2,588) 126,796

As at December 31, 2018, 2019 and 2020, the loss allowance for trade and other receivables reconciles to the opening loss allowance as follows:

Other receivables Trade (excluding receivables prepayment) Total RMB’000 RMB’000 RMB’000

At January 1, 2018 82,986 7,482 90,468 Net impairment losses/(reversal of net impairment losses) on financial assets 14,700 (4) 14,696 Amounts written off as uncollectible (7,088) – (7,088)

At December 31, 2018 90,598 7,478 98,076

At January 1, 2019 90,598 7,478 98,076 Net impairment losses/(reversal of net impairment losses) on financial assets 31,117 (5,600) 25,517 Amounts written off as uncollectible (8,069) – (8,069)

At December 31, 2019 113,646 1,878 115,524

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Other receivables Trade (excluding receivables prepayment) Total RMB’000 RMB’000 RMB’000

At January 1, 2020 113,646 1,878 115,524 Net impairment losses on financial assets 10,796 7,423 18,219 Amounts written off as uncollectible (8,967) – (8,967)

At December 31, 2020 115,475 9,301 124,776

As at December 31, 2018, 2019 and 2020, the gross carrying amount of trade and other receivables (excluding prepayments) was RMB1,404,975,000, RMB548,224,000 and RMB1,343,641,000 respectively, and represents the maximum exposure to loss.

3.1.2 Liquidity risk

To manage the liquidity risk, the Group monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the Group’s operations and mitigate the effects of fluctuations in cash flows.

The table below analyses the Group’s financial liabilities into relevant maturity grouping based on the remaining period at the end of each reporting period to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Repayable on demand or less Between than 1 year 1 and 2 years Total RMB’000 RMB’000 RMB’000

As at December 31, 2018 Trade and other payables (excluding accrued payroll and other tax payables) 1,644,751 – 1,644,751 Lease liabilities and interest payable 973 – 973

1,645,724 – 1,645,724

Repayable on demand or less Between than 1 year 1 and 2 years Total RMB’000 RMB’000 RMB’000

As at December 31, 2019 Trade and other payables (excluding accrued payroll and other tax payables) 854,997 – 854,997 Lease liabilities and interest payable 3,306 244 3,550

858,303 244 858,547

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Repayable on demand or less Between than 1 year 1 and 2 years Total RMB’000 RMB’000 RMB’000

As at December 31, 2020 Trade and other payables (excluding accrued payroll and other tax payables) 1,268,940 – 1,268,940 Lease liabilities and interest payable 1,433 1,217 2,650

1,270,373 1,217 1,271,590

None of the Group’s financial liabilities is repayable over 2 years.

3.2 Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, issue new shares or sell assets to reduce debt.

The Group monitors capital on the basis of the asset-liability ratio. This ratio is calculated as total liabilities divided by total assets.

As at December 31, 2018, 2019 and 2020, asset-liability ratio of the Group is as follows:

As at December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Asset-liability ratio 119% 108% 109%

4 Critical accounting estimates and judgments

The preparation of Historical Financial Information requires the use of certain critical accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgment in applying the Group’s accounting policies.

Estimates and judgments are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances

(a) Allowance on doubtful receivables

The Group makes allowances on receivables based on assumptions about risk of default and expected loss rates. The Group used judgment in making these assumptions and selecting the inputs to the impairment calculation, based on past collection history, existing market conditions as well as forward looking estimates at the end of each reporting period.

Where the expectation is different from the original estimate, such difference will impact the carrying amount of trade and other receivables, as well as doubtful debt expenses in the periods in which such estimate has been changed. For details of the key assumptions and inputs used, see Note 3.1.1 above.

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(b) Current and deferred income tax

The Group is subject to corporate income taxes in the PRC. Judgment is required in determining the amount of the provision for taxation and the timing of payment of the related taxations. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

Deferred tax assets relating to certain temporary differences and tax losses are recognised when management considers to be probable that future taxable profit will be available against which the temporary differences or tax losses can be utilised. The outcome of their actual utilization may be different.

5 Segment information

Management has determined the operating segments based on the reports reviewed by CODM. The CODM, who is responsible for allocating resources and assessing performance of the operating segment, has been identified as the executive directors of the Company.

During the Track Record Period, the Group is principally engaged in the provision of residential property management services and commercial property management services in the PRC. Management reviews the operating results of the business as a single operating segment as the nature of services, the type of customers for services, the method used to provide their services and the nature of regulatory environment in different regions of the PRC.

The operating entities of the Group are domiciled in the PRC and all of the revenue is derived in the PRC during the Track Record Period.

As at December 31, 2018, 2019 and 2020, all of the non-current assets of the Group were located in the PRC.

6 Revenue and cost of sales

(a) Revenue from contracts with customer

Revenue mainly comprises of proceeds from residential property management services and commercial property management services. An analysis of the Group’s revenue by category for the years ended December 31, 2018, 2019 and 2020 is as follows:

Year ended December 31, 2018 2019 2020 Cost of Cost of Cost of Revenue sales Revenue sales Revenue sales RMB’000 RMB’000 RMB’000

Residential property management services 1,091,677 1,011,164 1,388,771 1,224,628 1,757,126 1,385,287 Commercial property management services 731,771 541,021 781,330 556,113 840,296 567,966

1,823,448 1,552,185 2,170,101 1,780,741 2,597,422 1,953,253

Timing of revenue recognition – Over time 1,823,448 2,170,101 2,595,444 – At a point in time – – 1,978

1,823,448 2,170,101 2,597,422

For the years ended December 31, 2018, 2019 and 2020, revenue provided by the Group to Guangzhou R&F Group contributed 13%, 15% and 23% of the Group’s revenue, respectively. Other than Guangzhou R&F Group, the Group has a large number of customers, none of whom contributed 10% or more of the Group’s revenue during the Track Record Period.

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(b) Contract liabilities

(i) The Group has recognised the following revenue-related contract liabilities:

As at December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Contract liabilities Current – Residential property management services 172,015 175,768 219,875 – Commercial property management services 28,285 29,756 42,675

200,300 205,524 262,550

Non-current – Residential property management services 33,240 29,074 26,988 – Commercial property management services 1,558 5,479 7,887

34,798 34,553 34,875

(ii) Significant changes in contract liabilities

Contract liabilities of the Group mainly arise from the advance payments made by customers while the underlying services are yet to be provided.

(iii) Revenue recognised in relation to contract liabilities

The following table shows how much of the revenue recognised in the current reporting period relates to carried-forward contract liabilities.

Year ended December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Revenue recognised that was included in the balance of contract liabilities at the beginning of the year – Residential property management services 169,440 172,015 175,768 – Commercial property management services 20,245 28,285 29,756

189,685 200,300 205,524

For property management services, the Group recognises revenue in the amount that equals to the right to invoice which corresponds directly with the value to the customer of the Group’s performance to date, on a monthly basis. The Group bills the amount for services provided on a monthly basis or pre-charges service fee on fixed basis and payment is due within 30 days of invoice. The Group has elected the practical expedient for not to disclose the remaining performance obligations for these type of contracts.

For community value-added services, they are rendered in short period of time, which is generally less than a year, and the Group has elected the practical expedient for not to disclose the remaining performance obligations for these type of contracts.

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(d) Assets recognised from incremental costs to obtain a contract

During the Track Record Period, there was no significant incremental costs to obtain a contract.

7 Other income

Year ended December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Value-added tax (“VAT”) deductibles (Note(a)) – 5,943 8,636 Government grants (Note(b)) 801 4,424 6,698 Others 366 479 309

1,167 10,846 15,643

(a) VAT deductibles mainly represented additional deduction of input value-added tax applicable to the Company and its certain subsidiaries.

(b) Government grants mainly consisted of refund of paid unemployment insurance. There are no unfulfilled conditions or other contingencies attached to these grants.

8 Other losses – net

Year ended December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Net loss on disposal of property, plant and equipment 77 122 101 Penalty and others 741 2,055 1,814

818 2,177 1,915

9 Expenses by nature

Expenses included in cost of sales and administrative expenses are analysed as follows:

Year ended December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Employee benefit expenses (Note 10) 1,333,125 1,514,090 1,571,154 Maintenance costs 111,204 122,496 187,248 Greening and cleaning expenses 99,867 134,833 182,866 Utilities 161,406 164,222 171,547 Office expenses 46,831 55,655 66,454 Community service expenses 8,828 8,130 14,701 Depreciation and amortisation charges 8,630 12,212 13,834 Traveling and entertainment expenses 13,067 15,008 14,454 Cost of security and fire protection 5,775 5,627 7,517 Professional service fees 2,860 1,561 3,340 Auditors’ remuneration 30 262 423 Others 32,985 35,277 44,782

1,824,608 2,069,373 2,278,320

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10 Employee benefit expenses

Year ended December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Wages, salaries and bonuses 1,063,206 1,226,247 1,363,372 Social insurance expenses and housing benefits (Note (a)) 227,207 249,174 160,461 Other employee benefits (Note (b)) 42,712 38,669 47,321

1,333,125 1,514,090 1,571,154

(a) Employees in the Group’s PRC subsidiaries are required to participate in a defined contribution retirement scheme administrated and operated by the local municipal government. The Group’s PRC subsidiaries contribute funds which are calculated on certain percentage of the employee salary to the scheme to fund the retirement benefits of the employees.

(b) Other employee benefits mainly include team building expenses, meal and traveling allowances.

The five individuals whose emoluments were the highest in the Group included no director for the years ended December 31, 2018, 2019 and 2020 respectively. The emoluments payable to the 5 individuals during the Track Record Period are as follows:

Year ended December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Wages, salaries and bonuses 6,996 7,364 7,025 Social insurance expenses and housing benefits 318 237 256

7,314 7,601 7,281

The emoluments fell within the following bands:

Number of individuals Year ended December 31, 2018 2019 2020

HK$1,000,001–HK$1,500,000 2 1 2 HK$1,500,001–HK$2,000,000 3 4 3

555

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11 Finance income and cost

Year ended December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Finance income Interest income from bank deposits 1,817 2,115 2,640

Finance cost Interest expense of lease liabilities 61 225 210

12 Income tax (credit)/expenses

Year ended December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Current income tax 183 7,062 55,070 Deferred income tax (2,294) 14,878 22,220

(2,111) 21,940 77,290

The Company was incorporated in the Cayman Islands as an exempted company with limited liability under the Companies Act of Cayman Islands and accordingly, is exempted from Cayman Islands income tax. The Company’s subsidiaries in the BVI were incorporated under the International Business Companies Act of the BVI and accordingly, are exempted from British Virgin Island income tax.

Hong Kong profits tax has been provided at the rate of 16.5% on the estimated assessable profit in respect of operations in Hong Kong. There was no assessable profit for the subsidiaries incorporated in Hong Kong during the Track Record Period.

Income tax provision of the Group in respect of operations in the PRC has been calculated at the applicable tax rate on the estimated assessable profits for the year, based on the existing legislation, interpretations and practices in respect thereof. The statutory tax rate is 25% for the Track Record Period. Certain subsidiaries and branches of the Group in the PRC are located in western cities, and they are subject to a preferential income tax rate of 15% during the Track Record Period. The subsidiary and branches of the Group located in Hainan Province are also qualified to enjoy the preferential income tax rate of 15% from January 1, 2020.

The tax on the Group’s (loss)/profit before tax differs from the theoretical amount that would arise using the statutory tax rate applicable to profits of the group entities as follows:

Year ended December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

(Loss)/profit before income tax (13,751) 85,770 317,041

Tax calculated at applicable income tax rate of 25% (3,438) 21,443 79,260 Tax effects of: – Effect of different tax rates applicable to certain subsidiaries and branches – (277) (3,632) – Expenses not deductible for tax purposes 780 771 744 – Tax losses for which no deferred income tax asset was recognised 547 3 918

Income tax (credit)/expenses (2,111) 21,940 77,290

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13 Earnings per share

No earnings per share information is presented as its inclusion, for the purpose of this report, is not considered meaningful due to the Reorganization and the preparation of the results for each years ended December 31, 2018, 2019, 2020 on a combined basis as disclosed in Note 1.3.

14 Dividends

No dividend has been paid or declared by the Company since its incorporation and up to the date of this report.

During the year ended December 31, 2019, dividends of RMB100,000,000 were declared by a subsidiary now comprising the Group from its distributable retained profit to its then shareholders.

15 Property, plant and equipment

Furniture, fixtures and Motor Buildings equipment vehicles Machinery Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

As at January 1, 2018 Cost 32,154 44,850 8,441 1,362 86,807 Accumulated depreciation (4,186) (30,220) (7,590) (468) (42,464)

Net book amount 27,968 14,630 851 894 44,343

Year ended December 31, 2018 Opening net book amount 27,968 14,630 851 894 44,343 Additions – 7,631 415 1,240 9,286 Disposals – (64) (13) (5) (82) Depreciation charge (1,003) (5,696) (392) (153) (7,244)

Closing net book amount 26,965 16,501 861 1,976 46,303

As at December 31, 2018 Cost 32,154 50,979 8,794 2,583 94,510 Accumulated depreciation (5,189) (34,478) (7,933) (607) (48,207)

Net book amount 26,965 16,501 861 1,976 46,303

Year ended December 31, 2019 Opening net book amount 26,965 16,501 861 1,976 46,303 Additions – 10,827 445 413 11,685 Disposals – (182) (46) (10) (238) Depreciation charge (1,003) (6,366) (411) (227) (8,007)

Closing net book amount 25,962 20,780 849 2,152 49,743

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Furniture, fixtures and Motor Buildings equipment vehicles Machinery Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

As at December 31, 2019 Cost 32,154 60,461 8,609 2,874 104,098 Accumulated depreciation (6,192) (39,681) (7,760) (722) (54,355)

Net book amount 25,962 20,780 849 2,152 49,743

Year ended December 31, 2020 Opening net book amount 25,962 20,780 849 2,152 49,743 Additions – 12,160 1,231 553 13,944 Disposals – (96) (8) (1) (105) Depreciation charge (1,003) (7,675) (437) (265) (9,380)

Closing net book amount 24,959 25,169 1,635 2,439 54,202

As at December 31, 2020 Cost 32,154 71,416 9,733 3,422 116,725 Accumulated depreciation (7,195) (46,247) (8,098) (983) (62,523)

Net book amount 24,959 25,169 1,635 2,439 54,202

Depreciation expenses were charged to the following categories in the combined statements of comprehensive income:

Year ended December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Cost of sales 5,804 6,466 7,424 Administrative expenses 1,440 1,541 1,956

7,244 8,007 9,380

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16 Intangible assets

Computer software RMB’000

As at January 1, 2018 Cost 1,436 Accumulated amortisation (792)

Net book amount 644

Year ended December 31, 2018 Opening net book amount 644 Additions 31 Amortisation (151)

Closing net book amount 524

As at December 31, 2018 Cost 1,467 Accumulated amortisation (943)

Net book amount 524

Year ended December 31, 2019 Opening net book amount 524 Amortisation (148)

Closing net book amount 376

As at December 31, 2019 Cost 1,467 Accumulated amortisation (1,091)

Net book amount 376

Year ended December 31, 2020 Opening net book amount 376 Additions 55 Amortisation (110)

Closing net book amount 321

As at December 31, 2020 Cost 1,522 Accumulated amortisation (1,201)

Net book amount 321

Amortisation of intangible assets has been charged to administrative expenses in the combined statements of comprehensive income for the years ended December 31, 2018, 2019 and 2020.

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17 Financial instruments by category

As at December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Financial assets Trade and other receivables (excluding prepayments) (Note 18) 1,306,899 432,700 1,218,865 Cash and cash equivalents (Note 19) 355,267 690,799 405,641 Restricted cash (Note 20) 167 142 –

1,662,333 1,123,641 1,624,506

As at December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Financial liabilities at amortised cost Trade and other payables (excluding accrued payroll and other taxes payables) (Note 24) 1,644,751 854,997 1,268,940 Lease liabilities (Note 23) 956 3,466 2,536

1,645,707 858,463 1,271,476

18 Trade and other receivables and prepayments

As at December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Trade receivables (Note(a)) – Related parties (Note 27(c)) 242,149 93,968 248,329 – Third parties 285,206 339,558 354,954

527,355 433,526 603,283 Less: allowance for impairment of trade receivables (90,598) (113,646) (115,475)

436,757 319,880 487,808

Other receivables – Amounts due from related parties (Note 27(c)) 798,720 25,586 610,974 – Payments on behalf of property owners (Note (b)) 71,789 80,395 105,647 – Deposit 4,008 4,192 4,174 – Others 3,103 4,525 19,563

877,620 114,698 740,358 Less: allowance for impairment of other receivables (7,478) (1,878) (9,301)

870,142 112,820 731,057

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As at December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Prepayments – Utilities and others 5,288 6,865 7,618 – Prepaid business tax and other surcharges 4,324 4,238 4,511

9,612 11,103 12,129

Total 1,316,511 443,803 1,230,994

(a) Trade receivables mainly arise from property management services and value-added services to non-property owners.

Property management services income are received in accordance with the terms of the relevant services agreements. Service income from property management service is due for payment by the residents upon the issuance of demand note.

The related value-added services to property developers are usually due for payment upon the issuance of document of settlement.

As at December 31, 2018, 2019 and 2020, the aging analysis of the trade receivables based on recognition date of trade receivables were as follows:

As at December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Up to 1 year 260,966 224,405 408,844 1 to 2 years 116,262 90,266 85,149 2 to 3 years 64,879 41,065 45,087 3 to 4 years 30,045 28,768 20,508 4 to 5 years 16,752 23,859 15,911 Over 5 years 38,451 25,163 27,784

527,355 433,526 603,283

The Group applies the simplified approach to provide for expected credit losses prescribed by HKFRS 9. As at December 31, 2018, 2019 and 2020, a provision of RMB90,598,000, RMB113,646,000 and RMB115,475,000 was made against the gross amounts of trade receivables (Note 3.1.1).

(b) Payments on behalf of property owners mainly represented utilities costs of properties.

(c) As at December 31, 2018, 2019 and 2020, trade and other receivables were denominated in RMB and the fair value of trade and other receivables approximate their carrying amounts.

(d) As at December 31, 2018, 2019 and 2020, the net book value of trade and other receivables represented the Group’s maximum exposure to credit losses.

(e) Balances with related parties are repayable on demand, unsecured and interest free.

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19 Cash and cash equivalents

As at December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Cash at bank 354,522 690,682 405,588 Cash on hand 745 117 53

355,267 690,799 405,641

The carrying amounts of cash and cash equivalents were denominated in RMB and the fair value of cash and cash equivalents approximate their carrying amounts.

20 Restricted cash

Restricted cash represented cash deposits in relation to certain law suits.

21 Combined capital and share capital

(a) Combined capital of the Group

The Reorganization has not been completed as at December 31, 2020. As mentioned in Note 1.3, the Historical Financial Information has been prepared on a combined basis. Combined capital as at each balance sheet date represented the combined capital of the companies now comprising the Group after the elimination of the inter-company investments.

(b) Share capital of the Company

Number of ordinary shares Share capital Share capital HKD RMB’000

Authorised As at December 24, 2020 (date of incorporation) and December 31, 2020 38,000,000 380 –

Issued As at December 24, 2020 (date of incorporation) and December 31, 2020 6 – –

On December 24, 2020, the Company was incorporated in the Cayman Islands with an authorised share capital of HKD380,000 divided into 38,000,000 ordinary shares of HKD0.01 each. Upon the incorporation of the Company, one share each was issued at par to an independent initial subscriber, which was transferred to Sun Arise at the same day, Virtuous Charm, Prime Elegance, Jade Concord, Active Strength and Grand Favour respectively.

On 10 December 2019, additional capital of RMB295,000,000 was contributed by the then shareholders of Guangzhou Tianli.

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(d) Acquisition of subsidiaries from Guangzhou R&F during the Reorganization

As disclosed in Note 1.2, Guangzhou Fuxing acquired the entire equity interests in Datong Hengfu and Tianjin Huaxin at a cash consideration of RMB10,000,000 in 2019 and Guangzhou Tianli Group at a cash consideration of RMB300,000,000 in 2020, the amounts of which are the same as the paid-in share capital of respective entities, respectively. The consideration paid to Guangzhou R&F Group was treated as “deemed distribution” to shareholders. After the completion of the acquisitions, the entities became Guangzhou Fuxing’s wholly-owned subsidiaries.

The Group’s combined capital as at December 31, 2018 was RMB15,000,000, which was combined paid-in capital of Datong Hengfu, Tianjin Huaxin and Guangzhou Tianli at the same date. After the contribution of capital by the then shareholders of Guangzhou Tianli of RMB295,000,000 and after the acquisition of Datong Hengfu and Tianjin Huaxin, the Group’s combined capital became RMB300,000,000. As Guangzhou Fuxing’s shareholders have not yet injected any share capital to Guangzhou Fuxing, after the acquisition of Guangzhou Tianli by Guangzhou Fuxing, the combine capital of the Group became Zero.

22 Reserves

The amounts of the Group’s reserves and the movements therein for the years ended December 31, 2018, 2019 and 2020 are presented in the combined statements of changes in equity.

(a) Statutory reserve

In accordance with relevant rules and regulations in the PRC, companies incorporated in the PRC are required to transfer no less than 10% of their profit after taxation calculated under the PRC accounting standards and regulations to the statutory reserve fund, until the accumulated total of the fund reaches 50% of their registered capital. The statutory reserve fund can only be used, upon approval by the relevant authority, to offset previous years’ losses or to increase the capital of respective companies.

23 Leases

(a) Right-of-use assets

Office buildings, staff dormitories and others RMB’000

As at January 1, 2018 Cost 5,078 Accumulated depreciation (198)

Net book amount 4,880

Year ended December 31, 2018 Opening net book amount 4,880 Depreciation (1,235)

Closing net book amount 3,645

As at December 31, 2018 Cost 5,078 Accumulated depreciation (1,433)

Net book amount 3,645

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Office buildings, staff dormitories and others RMB’000

Year ended December 31, 2019 Opening net book amount 3,645 Additions 6,417 Depreciation (4,057)

Closing net book amount 6,005

As at December 31, 2019 Cost 11,495 Accumulated depreciation (5,490)

Net book amount 6,005

Year ended December 31, 2020 Opening net book amount 6,005 Additions 3,202 Depreciation (4,344)

Closing net book amount 4,863

As at December 31, 2020 Cost 14,697 Accumulated depreciation (9,834)

Net book amount 4,863

(b) Lease liabilities

As at December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Lease liabilities Current 956 3,226 1,346 Non-current – 240 1,190

956 3,466 2,536

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Year ended December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Depreciation charge of right-of-use assets – Leased properties 1,235 4,057 4,344

Interest expense (included in finance costs) 61 225 210

Expense relating to short-term and low-value leases (included in cost of sales and administrative expenses) 2,969 3,608 4,111

The total cash outflow for leases during the years ended 31 December 2018, 2019 and 2020 amounted to RMB4,152,000, RMB7,740,000 and RMB8,453,000 respectively.

(d) The Group’s leasing activities and how these are accounted for

The Group leases various office buildings, staff dormitories and office and other equipments. Rental contracts are typically made for fixed periods of six month to three years.

Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants.

24 Trade and other payables

As at December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Trade payables (Note(a)) – Related parties (Note 27(c)) 258 363 653 – Third parties 159,825 176,566 232,763

160,083 176,929 233,416 Other payables – Amounts due to related parties (Note 27(c)) 956,263 38,108 494,785 – Deposits 245,420 246,460 273,420 – Accrued payroll 249,453 230,460 258,263 – Amounts received from property owners on items to be paid on their behalf (Note (b)) 206,165 298,696 146,720 – Other taxes payables 44,630 43,318 32,742 – Others 76,820 94,804 120,599

1,778,751 951,846 1,326,529

1,938,834 1,128,775 1,559,945

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(a) As at December 31, 2018, 2019 and 2020, the aging analysis of the trade payables based on invoice date were as follows:

As at December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Up to 1 year 147,031 166,346 217,384 1 to 2 years 9,659 4,658 8,141 2 to 3 years 1,637 3,540 3,156 Over 3 years 1,756 2,385 4,735

160,083 176,929 233,416

(b) The amounts mainly represented utilities expenses temporarily collected from the property owners to be paid to related service providers.

(c) As at December 31, 2018, 2019 and 2020, trade and other payables were denominated in RMB and the carrying amounts of trade and other payables approximated their fair values.

(d) The amounts due to related parties were unsecured, interest-free and repayable on demand.

25 Deferred income tax

The analysis of deferred tax assets is as follows:

As at December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Deferred tax assets: – Deferred tax assets to be recovered after more than 12 months 86,375 63,822 30,302 – Deferred tax assets to be recovered within 12 months 15,434 23,109 34,409

101,809 86,931 64,711

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The movements in deferred income tax assets during the Track Record Period, without taking into consideration the offsetting of balances within the same tax jurisdiction, are as follows:

Allowance on doubtful debts Tax losses Others Total RMB’000 RMB’000 RMB’000 RMB’000

As at January 1, 2018 22,618 76,897 – 99,515 Credited/(charged) to the combined statements of comprehensive income 1,902 (243) 635 2,294

At December 31, 2018 24,520 76,654 635 101,809

As at January 1, 2019 24,520 76,654 635 101,809 Credited/(charged) to the combined statements of comprehensive income 4,362 (19,861) 621 (14,878)

At December 31, 2019 28,882 56,793 1,256 86,931

As at January 1, 2020 28,882 56,793 1,256 86,931 Credited/(charged) to the combined statements of comprehensive income 2,313 (25,074) 541 (22,220)

As at December 31, 2020 31,195 31,719 1,797 64,711

In accordance with the PRC tax law, tax losses may be carried forward against future taxable income for a period of five years. As at December 31, 2018, 2019 and 2020, the Group did not recognise deferred tax assets in respect of losses amounting to RMB104,424,000, RMB26,045,000 and RMB26,908,000, as it is uncertain that future taxable profit will be available against which the tax losses can be utilized. These tax losses will expire as follows:

Unutilised tax losses for which no deferred tax asset was recognised 2018 2019 2020 RMB’000 RMB’000 RMB’000

2019 78,392 – – 2020 2,810 2,810 – 2021 4,607 4,607 4,607 2022 16,429 16,429 16,429 2023 2,186 2,186 2,186 2024 – 13 13 2025 – – 3,673

104,424 26,045 26,908

According to CIT Law, a withholding income tax of 10% will be levied on the immediate holding companies outside the PRC when their PRC subsidiaries declare dividends out of profits earned after 1 January 2008. A lower 5% withholding income tax rate may be applied when the immediate holding companies of the PRC subsidiaries are established in Hong Kong and fulfil requirements under the tax treaty agreements between the relevant authorities of the PRC and Hong Kong.

As at December 31, 2018 and 2020, the Group has unrecognised deferred income tax liabilities arising from undistributed profits from the Group’s subsidiary in the PRC to its immediate holding company in Hong Kong. No provision has been made in respect of such withholding tax as the directors have confirmed that such profits will not be distributed in the foreseeable future. Unremitted earnings in this respect amounted to RMB22,568,000 and RMB148,130,000, respectively.

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26 Cash flow information

(a) Cash generated from operations

Year ended December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

(Loss)/profit before income tax (13,751) 85,770 317,041 Adjustments for: – Depreciation of property, plant and equipment (Note 15) 7,244 8,007 9,380 – Depreciation of right-of-use assets (Note 23) 1,235 4,057 4,344 – Amortisation of intangible assets (Note 16) 151 148 110 – Allowance for impairment of trade and other receivables 14,696 25,517 18,219 – Net loss on disposal of property, plant and equipment 77 122 101 – Finance income (1,817) (2,115) (2,640) – Finance expense 61 225 210

7,896 121,731 346,765 Changes in working capital: – Trade and other receivables and prepayments 230,757 98,270 (293,213) – Other non-current assets – 251 524 – Contract liabilities 23,223 4,979 57,348 – Trade and other payables (144,956) (50,228) 130,980 – Restricted cash 35 25 142

Cash generated from operations 116,955 175,028 242,546

(b) Non-cash transactions

During the year ended December 31, 2019, dividend of RMB100,000,000 declared by a subsidiary to its then shareholders was satisfied by offsetting its non-trade receivables due from its then shareholders.

During the year ended December 31, 2019, amounts due to related parties of RMB767,426,000 was offset with amounts due from related parties.

During the years ended December 31, 2019 and 2020, consideration of RMB10,000,000 and RMB300,000,000 respectively for the acquisition of Operating Entities from Guangzhou R&F during the Reorganization was paid by the Controlling Shareholders on behalf of the Company.

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Amounts due to related Lease parties liabilities Total RMB’000 RMB’000 RMB’000

As at January 1, 2018 754,065 2,078 756,143 Cash flows from financing activities 14,436 (1,122) 13,314 Interest accrual – 61 61 Interest paid – (61) (61)

As at December 31, 2018 768,501 956 769,457

As at January 1, 2019 768,501 956 769,457 Cash flows from financing activities (1,075) (3,907) (4,982) Interest accrual – 225 225 Non-cash movements (757,426) – (757,426) Addition of lease liabilities – 6,417 6,417 Interest paid – (225) (225)

As at December 31, 2019 10,000 3,466 13,466

As at January 1, 2020 10,000 3,466 13,466 Cash flows from financing activities – (4,132) (4,132) Interest accrual – 210 210 Non-cash movements 300,000 – 300,000 Addition of lease liabilities – 3,202 3,202 Interest paid – (210) (210)

As at December 31, 2020 310,000 2,536 312,536

27 Related party transactions

(a) Transactions with related parties

Year ended December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Provision of property management and related service – Guangzhou R&F Group 231,102 335,082 593,184 – Associates of Guangzhou R&F Group 16,237 21,754 2,510 – Joint ventures of Guangzhou R&F Group 12,132 14,089 13,137

259,471 370,925 608,831

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Year ended December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Purchase of goods and services: – Guangzhou R&F Group 567 3,045 3,296

Addition in right-of-use asset – Guangzhou R&F Group – 6,207 –

Interest expense of lease liabilities: – Guangzhou R&F Group – 203 65

Cash advance to related parties: – Guangzhou R&F Group 80,566 295,000 514,839

Cash advance from related parties: – Guangzhou R&F Group 14,436 – –

All of the transactions above were carried out in the normal course of the Group’s business and on terms as agreed between the transacting parties.

Prior to Guangzhou Fuxing’s acquisition of the entire equity interests of the Operating Entities from Guangzhou R&F as disclosed in Note1.2, the Operating Entities were wholly-owned subsidiaries of Guangzhou R&F. In accordance with the then enacted group policy issued by Guangzhou R&F, the Operating Entities provided free property management services to Guangzhou R&F Group with respect to the unsold property units developed by Guangzhou R&F Group.

After the Operating Entities were disposed to Guangzhou Fuxing by Guangzhou R&F Group, the aforementioned services became chargeable based on terms as agreed in the relevant property management service agreements.

(b) Key management compensation

Compensations for key management is set out below:

Year ended December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Wages, salaries and bonuses 4,185 4,476 3,966 Social insurance expenses and housing benefits 203 174 187

4,388 4,650 4,153

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As at December 31, 2018 2019 2020 RMB’000 RMB’000 RMB’000

Trade receivables – Guangzhou R&F Group 230,703 88,564 246,032 – Associates of Guangzhou R&F Group 6,818 1,125 – – Joint ventures of Guangzhou R&F Group 4,628 4,279 2,297

242,149 93,968 248,329

Other receivables (Note a) – Guangzhou R&F Group 797,995 25,556 610,931 – Joint ventures of Guangzhou R&F Group 725 30 43

798,720 25,586 610,974

Trade payables – Guangzhou R&F Group 258 363 653

Other payables (Note (b)) – Guangzhou R&F Group 956,201 27,275 183,575 – Associates of Guangzhou R&F Group – 353 – – Joint ventures of Guangzhou R&F Group 62 480 910 – The Controlling Shareholders – 10,000 310,300

956,263 38,108 494,785

Current lease liabilities – Guangzhou R&F Group – 3,038 –

Balances with related parties are repayable on demand, unsecured and interest free.

Note a: Included in the amounts due from related parties as at December 31, 2018, 2019 and 2020, RMB761,126,000, RMB12,063,000 and RMB524,402,000 are non-trade in nature and have been [fully] settled as at the date of this report. The remaining balance of trade nature mainly represented the property management fee collected by related parties on behalf of the Group.

Note b: Included in the amounts due to related parties as at December 31, 2018, 2019 and 2020, RMB768,501,000, RMB10,000,000 and RMB310,000,000 are non-trade in nature and have been [fully] settled as at the date of this report. The remaining balance of trade nature mainly represented the utilities costs paid by related parties on behalf of the Group.

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28 Commitments and contingent liabilities

Save as disclosed elsewhere in the Accountant’s Report, the Group did not have any material contingent liabilities as at December 31, 2018, 2019 and 2020.

29 Directors’ and benefits and interests

(a) Directors’ emoluments

The directors of the Company are Ms. Wang Heng, Mr. Hu Jie, Mr. Li Sze Lim, Mr. Zhang Li, Mr. Zheng Ercheng, Mr. Zhang Yucong and Ms. Xin Zhu.

(i) Ms. Wang Heng and Mr. Hu Jie were appointed as the executive directors on March 30, 2021.

(ii) Mr. Li Sze Lim and Mr. Zhang Li were re-designed as the non-executive directors on March 30, 2021.

(iii) Mr. Zheng Ercheng, Mr. Zhang Yucong and Ms. Xin Zhu were appointed as the independent non-executive directors, on [●].

None of the above directors has received any emoluments in respect of their service for the Group during the Track Record Period.

(b) Directors’ retirement benefits and termination benefits

There were no retirement benefits paid to or receivable by directors during the Track Record Period by defined benefit pension plans operated by the Group and there were no director’s termination benefits subsisted during the Track Record period

During the Track Record Period, the Group did not pay consideration to any third parties for making available directors’ services.

(d) Information about loans, quasi-loans and other dealings in favor of directors, controlled bodies corporate by and connected entities with such directors

Save as disclosed in this report, during the Track Record Period, there were no loans, quasi-loans and other dealings entered into by the Company or subsidiaries undertaking of the Company, where applicable, in favor of directors.

(e) Directors’ material interests in transactions, arrangements or contracts

Save as disclosed in this report, no significant transactions, arrangements and contracts in relation to the Group’s business to which the Company was a party and in which a director of the Company had a material interest, whether directly or indirectly, subsisted as at December 31, 2018, 2019 and 2020 or at any time during the Track Record Period.

30 Event after the balance sheet date

On March 30, 2021, the Controlling Shareholders injected capital of RMB310,000,000 to the Group in cash to finance the Group’s settlement of its amount due to the Controlling Shareholders of RMB310,000,000 on the same date.

III SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by the Company or any of the companies now comprising the Group in respect of any period subsequent to December 31, 2020 and up to the date of this report. No dividend or distribution has been declared or made by the Company or any of the companies now comprising the Group in respect of any period subsequent to December 31, 2020.

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The information set out in this Appendix II does not form part of the Accountant’s Report from PricewaterhouseCoopers, Certified Public Accountants, the reporting accountant of our Company, as set out in Appendix I to this document, and is included herein for illustrative purpose only. The unaudited pro forma financial information should be read in conjunction with the sections headed “Financial Information” and “Appendix I – Accountant’s Report”.

UNAUDITED PRO FORMA STATEMENT OF ADJUSTED COMBINED NET TANGIBLE ASSETS

The following unaudited pro forma statement of adjusted combined net tangible assets of our Group prepared in accordance with Rule 4.29 of the Listing Rules are set out below to illustrate the effect of the [REDACTED] on the net tangible assets of our Group attributable to the owners of the Company as of December 31, 2020 as if the [REDACTED] had taken place on December 31, 2020.

The unaudited pro forma adjusted combined net tangible assets has been prepared for illustrative purposes only and because of its hypothetical nature, it may not give a true picture of the combined net tangible assets of the Group as of December 31, 2020 or at any future dates following the [REDACTED].

Unaudited pro Audited forma adjusted combined net combined net tangible liabilities tangible assets attributable to attributable to owners of the owners of the Unaudited pro forma Company as of Estimated net Company as of adjusted combined December 31, proceeds from 31 December net tangible assets 2020 the [REDACTED] 2020 per Share (Note 1) (Note 2) (Notes 3 & 4) RMB’000 RMB’000 RMB’000 RMB HK$

Based on an [REDACTED] of HK$[REDACTED] per Share (161,049) [REDACTED][REDACTED][REDACTED][REDACTED] Based on an [REDACTED] of HK$[REDACTED] per Share (161,049) [REDACTED][REDACTED][REDACTED][REDACTED]

Notes:

(1) The audited combined net tangible liabilities attributable to owners of the Company as of December 31, 2020 is extracted from the Accountant’s Report set out in Appendix I to this Document, which is based on the audited combined net liabilities attributable to owners of the Company as of December 31, 2020 of approximately RMB160,728,000 with an adjustment for the intangible assets attributable to the owners of the Company as of December 31, 2020 of approximately RMB321,000.

(2) The estimated net proceeds from the [REDACTED] are based on [REDACTED] Shares and the indicative [REDACTED] of HK$[REDACTED] and HK$[REDACTED] per Share after deduction of the estimated [REDACTED] and other related expenses payable by us, and takes no account of any shares which may be issued upon the exercise of the [REDACTED].

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(3) The unaudited pro forma adjusted combined net tangible assets per Share is calculated based on [REDACTED] Shares in issue immediately following the completion of the [REDACTED] and does not take into account of any Shares which may be issued upon the exercise of the [REDACTED].

(4) The unaudited pro forma adjusted combined net tangible assets per Share is converted into Hong Kong dollars at an exchange rate of HK$1.0 to RMB[0.83797]. No representation is made that Renminbi amounts have been, could have been or may be converted into Hong Kong dollars, or vice versa, at that rate.

(5) No adjustment has been made to the unaudited pro forma adjusted combined net tangible assets to reflect any trading results or other transactions of the Group entered into subsequent to December 31, 2020. Had the capital injection from shareholder of RMB310,000,000 been taken into account, the unaudited pro forma adjusted combined net tangible assets per Share would have been increased to HK$[REDACTED] and HK$[REDACTED] based on the indicative [REDACTED]of HK$[REDACTED] and HK$[REDACTED].

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[REDACTED]

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[REDACTED]

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[REDACTED]

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Set out below is a summary of certain provisions of the Memorandum and Articles of Association of the Company and of certain aspects of the Companies Act (as amended) of the Cayman Islands (the “Companies Act”).

The Company was incorporated in the Cayman Islands as an exempted company with limited liability on 24 December 2020 under the Companies Act. The Company’s constitutional documents consist of its Amended and Restated Memorandum of Association (“Memorandum”) and its Amended and Restated Articles of Association (“Articles”).

1 MEMORANDUM OF ASSOCIATION

1.1 The Memorandum provides, inter alia, that the liability of members of the Company is limited and that the objects for which the Company is established are unrestricted (and therefore include acting as an investment company), and that the Company shall have and be capable of exercising any and all of the powers at any time or from time to time exercisable by a natural person or body corporate whether as principal, agent, contractor or otherwise and, since the Company is an exempted company, that the Company will not trade in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the Company carried on outside the Cayman Islands.

1.2 By special resolution the Company may alter the Memorandum with respect to any objects, powers or other matters specified in it.

2 ARTICLES OF ASSOCIATION

The Articles were adopted on [Date]. A summary of certain provisions of the Articles is set out below.

2.1 Shares

(a) Classes of shares

The share capital of the Company consists of ordinary shares.

(b) Variation of rights of existing shares or classes of shares

Subject to the Companies Act, if at any time the share capital of the Company is divided into different classes of shares, all or any of the special rights attached to any class of shares may (unless otherwise provided for by the terms of issue of the shares of that class) be varied, modified or abrogated either with the consent in writing of the holders of not less than three-fourths in nominal value of the issued shares of that class or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class. The provisions of the Articles relating to general meetings shall mutatis mutandis apply to every such separate general meeting, but so that

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the necessary quorum (other than at an adjourned meeting) shall be not less than two persons together holding (or, in the case of a shareholder being a corporation, by its duly authorized representative) or representing by proxy not less than one-third in nominal value of the issued shares of that class. Every holder of shares of the class shall be entitled on a poll to one vote for every such share held by him, and any holder of shares of the class present in person or by proxy may demand a poll.

Any special rights conferred upon the holders of any shares or class of shares shall not, unless otherwise expressly provided in the rights attaching to the terms of issue of such shares, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

The Company may, by an ordinary resolution of its members:

(i) increase its share capital by the creation of new shares of such amount as it thinks expedient;

(ii) consolidate or divide all or any of its share capital into shares of larger or smaller amount than its existing shares;

(iii) divide its unissued shares into several classes and attach to such shares any preferential, deferred, qualified or special rights, privileges or conditions;

(iv) subdivide its shares or any of them into shares of an amount smaller than that fixed by the Memorandum;

(v) cancel any shares which, at the date of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the shares so cancelled;

(vi) make provision for the allotment and issue of shares which do not carry any voting rights;

(vii) change the currency of denomination of its share capital; and

(viii) reduce its share premium account in any manner authorised and subject to any conditions prescribed by law.

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(d) Transfer of shares

Subject to the Companies Act and the requirements of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”), all transfers of shares shall be effected by an instrument of transfer in the usual or common form or in such other form as the Board may approve and may be under hand or, if the transferor or transferee is a Clearing House or its nominee(s), under hand or by machine imprinted signature, or by such other manner of execution as the Board may approve from time to time.

Execution of the instrument of transfer shall be by or on behalf of the transferor and the transferee, provided that the Board may dispense with the execution of the instrument of transfer by the transferor or transferee or accept mechanically executed transfers. The transferor shall be deemed to remain the holder of a share until the name of the transferee is entered in the register of members of the Company in respect of that share.

The Board may, in its absolute discretion, at any time and from time to time remove any share on the principal register to any branch register or any share on any branch register to the principal register or any other branch register.

Unless the Board otherwise agrees, no shares on the principal register shall be removed to any branch register nor shall shares on any branch register be removed to the principal register or any other branch register. All removals and other documents of title shall be lodged for registration and registered, in the case of shares on any branch register, at the relevant registration office and, in the case of shares on the principal register, at the place at which the principal register is located.

The Board may, in its absolute discretion, decline to register a transfer of any share (not being a fully paid up share) to a person of whom it does not approve or on which the Company has a lien. It may also decline to register a transfer of any share issued under any share option scheme upon which a restriction on transfer subsists or a transfer of any share to more than four joint holders.

The Board may decline to recognise any instrument of transfer unless a certain fee, up to such maximum sum as the Stock Exchange may determine to be payable, is paid to the Company, the instrument of transfer is properly stamped (if applicable), is in respect of only one class of share and is lodged at the relevant registration office or the place at which the principal register is located accompanied by the relevant share certificate(s) and such other evidence as the Board may reasonably require is provided to show the right of the transferor to make the transfer (and if the instrument of transfer is executed by some other person on his behalf, the authority of that person so to do).

The register of members may, subject to the Listing Rules, be closed at such time or for such period not exceeding in the whole 30 days in each year as the Board may determine.

Fully paid shares shall be free from any restriction on transfer (except when permitted by the Stock Exchange) and shall also be free from all liens.

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(e) Power of the Company to purchase its own shares

The Company may purchase its own shares subject to certain restrictions and the Board may only exercise this power on behalf of the Company subject to any applicable requirement imposed from time to time by the Articles or any code, rules or regulations issued from time to time by the Stock Exchange and/or the Securities and Futures Commission of Hong Kong.

Where the Company purchases for redemption a redeemable Share, purchases not made through the market or by tender shall be limited to a maximum price and, if purchases are by tender, tenders shall be available to all members alike.

(f) Power of any subsidiary of the Company to own shares in the Company

There are no provisions in the Articles relating to the ownership of shares in the Company by a subsidiary.

(g) Calls on shares and forfeiture of shares

The Board may, from time to time, make such calls as it thinks fit upon the members in respect of any monies unpaid on the shares held by them respectively (whether on account of the nominal value of the shares or by way of premium) and not by the conditions of allotment of such shares made payable at fixed times. A call may be made payable either in one sum or by instalments. If the sum payable in respect of any call or instalment is not paid on or before the day appointed for payment thereof, the person or persons from whom the sum is due shall pay interest on the same at such rate not exceeding 20% per annum as the Board shall fix from the day appointed for payment to the time of actual payment, but the Board may waive payment of such interest wholly or in part. The Board may, if it thinks fit, receive from any member willing to advance the same, either in money or money’s worth, all or any part of the money uncalled and unpaid or instalments payable upon any shares held by him, and in respect of all or any of the monies so advanced the Company may pay interest at such rate (if any) not exceeding 20% per annum as the Board may decide.

If a member fails to pay any call or instalment of a call on the day appointed for payment, the Board may, for so long as any part of the call or instalment remains unpaid, serve not less than 14 days’ notice on the member requiring payment of so much of the call or instalment as is unpaid, together with any interest which may have accrued and which may still accrue up to the date of actual payment. The notice shall name a further day (not earlier than the expiration of 14 days from the date of the notice) on or before which the payment required by the notice is to be made, and shall also name the place where payment is to be made. The notice shall also state that, in the event of non-payment at or before the appointed time, the shares in respect of which the call was made will be liable to be forfeited.

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If the requirements of any such notice are not complied with, any share in respect of which the notice has been given may at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of the Board to that effect. Such forfeiture will include all dividends and bonuses declared in respect of the forfeited share and not actually paid before the forfeiture.

A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares but shall, nevertheless, remain liable to pay to the Company all monies which, at the date of forfeiture, were payable by him to the Company in respect of the shares together with (if the Board shall in its discretion so require) interest thereon from the date of forfeiture until payment at such rate not exceeding 20% per annum as the Board may prescribe.

2.2 Directors

(a) Appointment, retirement and removal

At any time or from time to time, the Board shall have the power to appoint any person as a Director either to fill a casual vacancy on the Board or as an additional Director to the existing Board subject to any maximum number of Directors, if any, as may be determined by the members in general meeting. Any Director so appointed to fill a casual vacancy shall hold office only until the first general meeting of the Company after his appointment and be subject to re-election at such meeting. Any Director so appointed as an addition to the existing Board shall hold office only until the first annual general meeting of the Company after his appointment and be eligible for re-election at such meeting. Any Director so appointed by the Board shall not be taken into account in determining the Directors or the number of Directors who are to retire by rotation at an annual general meeting.

At each annual general meeting, one third of the Directors for the time being shall retire from office by rotation. However, if the number of Directors is not a multiple of three, then the number nearest to but not less than one third shall be the number of retiring Directors. The Directors to retire in each year shall be those who have been in office longest since their last re-election or appointment but, as between persons who became or were last re-elected Directors on the same day, those to retire shall (unless they otherwise agree among themselves) be determined by lot.

No person, other than a retiring Director, shall, unless recommended by the Board for election, be eligible for election to the office of Director at any general meeting, unless notice in writing of the intention to propose that person for election as a Director and notice in writing by that person of his willingness to be elected has been lodged at the head office or at the registration office of the Company. The period for lodgement of

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such notices shall commence no earlier than the day after despatch of the notice of the relevant meeting and end no later than seven days before the date of such meeting and the minimum length of the period during which such notices may be lodged must be at least seven days.

A Director is not required to hold any shares in the Company by way of qualification nor is there any specified upper or lower age limit for Directors either for accession to or retirement from the Board.

A Director may be removed by an ordinary resolution of the Company before the expiration of his term of office (but without prejudice to any claim which such Director may have for damages for any breach of any contract between him and the Company) and the Company may by ordinary resolution appoint another in his place. Any Director so appointed shall be subject to the “retirement by rotation” provisions. The number of Directors shall not be less than two.

The office of a Director shall be vacated if he:

(i) resign;

(ii) dies;

(iii) is declared to be of unsound mind and the Board resolves that his office be vacated;

(iv) becomes bankrupt or has a receiving order made against him or suspends payment or compounds with his creditors generally;

(v) he is prohibited from being or ceases to be a director by operation of law;

(vi) without special leave, is absent from meetings of the Board for six consecutive months, and the Board resolves that his office is vacated;

(vii) has been required by the stock exchange of the Relevant Territory (as defined in the Articles) to cease to be a Director; or

(viii) is removed from office by the requisite majority of the Directors or otherwise pursuant to the Articles.

From time to time the Board may appoint one or more of its body to be managing director, joint managing director or deputy managing director or to hold any other employment or executive office with the Company for such period and upon such terms as the Board may determine, and the Board may revoke or terminate any of such appointments. The Board may also delegate any of its powers to committees consisting

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of such Director(s) or other person(s) as the Board thinks fit, and from time to time it may also revoke such delegation or revoke the appointment of and discharge any such committees either wholly or in part, and either as to persons or purposes, but every committee so formed shall, in the exercise of the powers so delegated, conform to any regulations that may from time to time be imposed upon it by the Board.

(b) Power to allot and issue shares and warrants

Subject to the provisions of the Companies Act, the Memorandum and Articles and without prejudice to any special rights conferred on the holders of any shares or class of shares, any share may be issued with or have attached to it such rights, or such restrictions, whether with regard to dividend, voting, return of capital or otherwise, as the Company may by ordinary resolution determine (or, in the absence of any such determination or so far as the same may not make specific provision, as the Board may determine). Any share may be issued on terms that, upon the happening of a specified event or upon a given date and either at the option of the Company or the holder of the share, it is liable to be redeemed.

The Board may issue warrants to subscribe for any class of shares or other securities of the Company on such terms as it may from time to time determine.

Where warrants are issued to bearer, no certificate in respect of such warrants shall be issued to replace one that has been lost unless the Board is satisfied beyond reasonable doubt that the original certificate has been destroyed and the Company has received an indemnity in such form as the Board thinks fit with regard to the issue of any such replacement certificate.

Subject to the provisions of the Companies Act, the Articles and, where applicable, the rules of any stock exchange of the Relevant Territory (as defined in the Articles) and without prejudice to any special rights or restrictions for the time being attached to any shares or any class of shares, all unissued shares in the Company shall be at the disposal of the Board, which may offer, allot, grant options over or otherwise dispose of them to such persons, at such times, for such consideration and on such terms and conditions as it in its absolute discretion thinks fit, but so that no shares shall be issued at a discount.

Neither the Company nor the Board shall be obliged, when making or granting any allotment of, offer of, option over or disposal of shares, to make, or make available, any such allotment, offer, option or shares to members or others whose registered addresses are in any particular territory or territories where, in the absence of a registration statement or other special formalities, this is or may, in the opinion of the Board, be unlawful or impracticable. However, no member affected as a result of the foregoing shall be, or be deemed to be, a separate class of members for any purpose whatsoever.

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While there are no specific provisions in the Articles relating to the disposal of the assets of the Company or any of its subsidiaries, the Board may exercise all powers and do all acts and things which may be exercised or done or approved by the Company and which are not required by the Articles or the Companies Act to be exercised or done by the Company in general meeting, but if such power or act is regulated by the Company in general meeting, such regulation shall not invalidate any prior act of the Board which would have been valid if such regulation had not been made.

(d) Borrowing powers

The Board may exercise all the powers of the Company to raise or borrow money, to mortgage or charge all or any part of the undertaking, property and uncalled capital of the Company and, subject to the Companies Act, to issue debentures, debenture stock, bonds and other securities of the Company, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party.

(e) Remuneration

The Directors shall be entitled to receive, as ordinary remuneration for their services, such sums as shall from time to time be determined by the Board or the Company in general meeting, as the case may be, such sum (unless otherwise directed by the resolution by which it is determined) to be divided among the Directors in such proportions and in such manner as they may agree or, failing agreement, either equally or, in the case of any Director holding office for only a portion of the period in respect of which the remuneration is payable, pro rata. The Directors shall also be entitled to be repaid all expenses reasonably incurred by them in attending any Board meetings, committee meetings or general meetings or otherwise in connection with the discharge of their duties as Directors. Such remuneration shall be in addition to any other remuneration to which a Director who holds any salaried employment or office in the Company may be entitled by reason of such employment or office.

Any Director who, at the request of the Company, performs services which in the opinion of the Board go beyond the ordinary duties of a Director may be paid such special or extra remuneration as the Board may determine, in addition to or in substitution for any ordinary remuneration as a Director. An executive Director appointed to be a managing director, joint managing director, deputy managing director or other executive officer shall receive such remuneration and such other benefits and allowances as the Board may from time to time decide. Such remuneration shall be in addition to his ordinary remuneration as a Director.

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The Board may establish, either on its own or jointly in concurrence or agreement with subsidiaries of the Company or companies with which the Company is associated in business, or may make contributions out of the Company’s monies to, any schemes or funds for providing pensions, sickness or compassionate allowances, life assurance or other benefits for employees (which expression as used in this and the following paragraph shall include any Director or former Director who may hold or have held any executive office or any office of profit with the Company or any of its subsidiaries) and former employees of the Company and their dependents or any class or classes of such persons.

The Board may also pay, enter into agreements to pay or make grants of revocable or irrevocable, whether or not subject to any terms or conditions, pensions or other benefits to employees and former employees and their dependents, or to any of such persons, including pensions or benefits additional to those, if any, to which such employees or former employees or their dependents are or may become entitled under any such scheme or fund as mentioned above. Such pension or benefit may, if deemed desirable by the Board, be granted to an employee either before and in anticipation of, or upon or at any time after, his actual retirement.

(f) Compensation or payments for loss of office

Payments to any present Director or past Director of any sum by way of compensation for loss of office or as consideration for or in connection with his retirement from office (not being a payment to which the Director is contractually or statutorily entitled) must be approved by the Company in general meeting.

(g) Loans and provision of security for loans to Directors

The Company shall not directly or indirectly make a loan to a Director or a director of any holding company of the Company or any of their respective close associates, enter into any guarantee or provide any security in connection with a loan made by any person to a Director or a director of any holding company of the Company or any of their respective close associates, or, if any one or more of the Directors hold(s) (jointly or severally or directly or indirectly) a controlling interest in another company, make a loan to that other company or enter into any guarantee or provide any security in connection with a loan made by any person to that other company.

(h) Disclosure of interest in contracts with the Company or any of its subsidiaries

With the exception of the office of auditor of the Company, a Director may hold any other office or place of profit with the Company in conjunction with his office of Director for such period and upon such terms as the Board may determine, and may be paid such extra remuneration for that other office or place of profit, in whatever form, in addition to any remuneration provided for by or pursuant to any other Articles. A Director may be

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or become a director, officer or member of any other company in which the Company may be interested, and shall not be liable to account to the Company or the members for any remuneration or other benefits received by him as a director, officer or member of such other company. The Board may also cause the voting power conferred by the shares in any other company held or owned by the Company to be exercised in such manner in all respects as it thinks fit, including the exercise in favour of any resolution appointing the Directors or any of them to be directors or officers of such other company.

No Director or intended Director shall be disqualified by his office from contracting with the Company, nor shall any such contract or any other contract or arrangement in which any Director is in any way interested be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realised by any such contract or arrangement by reason only of such Director holding that office or the fiduciary relationship established by it. A Director who is, in any way, materially interested in a contract or arrangement or proposed contract or arrangement with the Company shall declare the nature of his interest at the earliest meeting of the Board at which he may practically do so.

There is no power to freeze or otherwise impair any of the rights attaching to any share by reason that the person or persons who are interested directly or indirectly in that share have failed to disclose their interests to the Company.

A Director shall not vote or be counted in the quorum on any resolution of the Board in respect of any contract or arrangement or proposal in which he or any of his close associate(s) has/have a material interest, and if he shall do so his vote shall not be counted nor shall he be counted in the quorum for that resolution, but this prohibition shall not apply to any of the following matters:

(i) the giving of any security or indemnity to the Director or his close associate(s) in respect of money lent or obligations incurred or undertaken by him or any of them at the request of or for the benefit of the Company or any of its subsidiaries;

(ii) the giving of any security or indemnity to a third party in respect of a debt or obligation of the Company or any of its subsidiaries for which the Director or his close associate(s) has/have himself/themselves assumed responsibility in whole or in part whether alone or jointly under a guarantee or indemnity or by the giving of security;

(iii) any proposal concerning an offer of shares, debentures or other securities of or by the Company or any other company which the Company may promote or be interested in for subscription or purchase, where the Director or his close associate(s) is/are or is/are to be interested as a participant in the underwriting or sub-underwriting of the offer;

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(iv) any proposal or arrangement concerning the benefit of employees of the Company or any of its subsidiaries, including the adoption, modification or operation of either:

(A) any employees’ share scheme or any share incentive or share option scheme under which the Director or his close associate(s) may benefit; or

(B) any of a pension fund or retirement, death or disability benefits scheme which relates to Directors, their close associates and employees of the Company or any of its subsidiaries and does not provide in respect of any Director or his close associate(s) any privilege or advantage not generally accorded to the class of persons to which such scheme or fund relates; and

(v) any contract or arrangement in which the Director or his close associate(s) is/are interested in the same manner as other holders of shares, debentures or other securities of the Company by virtue only of his/their interest in those shares, debentures or other securities.

2.3 Proceedings of the Board

The Board may meet anywhere in the world for the despatch of business and may adjourn and otherwise regulate its meetings as it thinks fit. Questions arising at any meeting shall be determined by a majority of votes. In the case of an equality of votes, the chairman of the meeting shall have a second or casting vote.

2.4 Alterations to the constitutional documents and the Company’s name

To the extent that the same is permissible under the Companies Act and subject to the Articles, the Memorandum and Articles of the Company may only be altered or amended, and the name of the Company may only be changed, with the sanction of a special resolution of the Company.

2.5 Meetings of Member

(a) Special and ordinary resolutions

A special resolution of the Company must be passed by a majority of not less than three-fourths of the votes cast by such members as, being entitled so to do, vote in person or by proxy or, in the case of members which are corporations, by their duly authorised representatives or, where proxies are allowed, by proxy at a general meeting of which notice specifying the intention to propose the resolution as a special resolution has been duly given.

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Under the Companies Act, a copy of any special resolution must be forwarded to the Registrar of Companies in the Cayman Islands (the “Registrar of Companies”) within 15 days of being passed.

An “ordinary resolution”, by contrast, is a resolution passed by a simple majority of the votes of such members of the Company as, being entitled to do so, vote in person or, in the case of members which are corporations, by their duly authorised representatives or, where proxies are allowed, by proxy at a general meeting of which notice has been duly given.

A resolution in writing signed by or on behalf of all members shall be treated as an ordinary resolution duly passed at a general meeting of the Company duly convened and held, and where relevant as a special resolution so passed.

(b) Voting rights and right to demand a poll

Subject to any special rights, restrictions or privileges as to voting for the time being attached to any class or classes of shares at any general meeting:

(i) on a poll every member present in person or by proxy or, in the case of a member being a corporation, by its duly authorised representative shall have one vote for every share which is fully paid or credited as fully paid registered in his name in the register of members of the Company but so that no amount paid up or credited as paid up on a share in advance of calls or instalments is treated for this purpose as paid up on the share; and

(ii) on a show of hands every member who is present in person (or, in the case of a member being a corporation, by its duly authorised representative) or by proxy shall have one vote. Where more than one proxy is appointed by a member which is a Clearing House (as defined in the Articles) or its nominee(s), each such proxy shall have one vote on a show of hands.

On a poll, a member entitled to more than one vote need not use all his votes or cast all the votes he does use in the same way.

At any general meeting a resolution put to the vote of the meeting is to be decided by poll save that the chairman of the meeting may, pursuant to the Listing Rules, allow a resolution to be voted on by a show of hands. Where a show of hands is allowed, before or on the declaration of the result of the show of hands, a poll may be demanded by (in each case by members present in person or by proxy or by a duly authorised corporate representative):

(i) at least two members;

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(ii) any member or members representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; or

(iii) a member or members holding shares in the Company conferring a right to vote at the meeting on which an aggregate sum has been paid equal to not less than one-tenth of the total sum paid up on all the shares conferring that right.

Should a Clearing House or its nominee(s) be a member of the Company, such person or persons may be authorised as it thinks fit to act as its representative(s) at any meeting of the Company or at any meeting of any class of members of the Company provided that, if more than one person is so authorised, the authorisation shall specify the number and class of shares in respect of which each such person is so authorised. A person authorised in accordance with this provision shall be deemed to have been duly authorised without further evidence of the facts and be entitled to exercise the same rights and powers on behalf of the Clearing House or its nominee(s) as if such person were an individual member including the right to vote individually on a show of hands.

Where the Company has knowledge that any member is, under the Listing Rules, required to abstain from voting on any particular resolution or restricted to voting only for or only against any particular resolution, any votes cast by or on behalf of such member in contravention of such requirement or restriction shall not be counted.

The Company must hold an annual general meeting each year other than the year of the Company’s adoption of the Articles. Such meeting must be held not more than 15 months after the holding of the last preceding annual general meeting, or such longer period as may be authorised by the Stock Exchange at such time and place as may be determined by the Board.

(d) Notices of meetings and business to be conducted

An annual general meeting of the Company shall be called by at least 21 days’ notice in writing, and any other general meeting of the Company shall be called by at least 14 days’ notice in writing. The notice shall be exclusive of the day on which it is served or deemed to be served and of the day for which it is given, and must specify the time, place and agenda of the meeting and particulars of the resolution(s) to be considered at that meeting and, in the case of special business, the general nature of that business.

Except where otherwise expressly stated, any notice or document (including a share certificate) to be given or issued under the Articles shall be in writing, and may be served by the Company on any member personally, by post to such member’s registered address or (in the case of a notice) by advertisement in the newspapers. Any member whose registered address is outside Hong Kong may notify the Company in writing of an address in Hong Kong which shall be deemed to be his registered address for this purpose. Subject to the Companies Act and the Listing Rules, a notice or document may also be served or delivered by the Company to any member by electronic means.

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Although a meeting of the Company may be called by shorter notice than as specified above, such meeting may be deemed to have been duly called if it is so agreed:

(i) in the case of an annual general meeting, by all members of the Company entitled to attend and vote thereat; and

(ii) in the case of any other meeting, by a majority in number of the members having a right to attend and vote at the meeting holding not less than 95% of the total voting rights in the Company.

All business transacted at an extraordinary general meeting shall be deemed special business. All business shall also be deemed special business where it is transacted at an annual general meeting, with the exception of certain routine matters which shall be deemed ordinary business.

Extraordinary general meetings shall also be convened on the requisition of one or more members holding at the date of deposit of the requisition, not less than one tenth of the paid up capital of the Company having the right of voting at general meetings.

(e) Quorum for meetings and separate class meetings

No business shall be transacted at any general meeting unless a quorum is present when the meeting proceeds to business, and continues to be present until the conclusion of the meeting.

The quorum for a general meeting shall be two members present in person (or in the case of a member being a corporation, by its duly authorised representative) or by proxy and entitled to vote. In respect of a separate class meeting (other than an adjourned meeting) convened to sanction the modification of class rights the necessary quorum shall be two persons holding or representing by proxy not less than one-third in nominal value of the issued shares of that class.

(f) Proxies

Any member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint another person as his proxy to attend and vote instead of him. A member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at a general meeting of the Company or at a class meeting. A proxy need not be a member of the Company and shall be entitled to exercise the same powers on behalf of a member who is an individual and for whom he acts as proxy as such member could exercise. In addition, a proxy shall be entitled to exercise the same powers on behalf of a member which is a corporation and for which he acts as proxy as such member could exercise if it were an individual member. On a poll or on a show of hands, votes may be given either personally (or, in the case of a member being a corporation, by its duly authorized representative) or by proxy.

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The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing, or if the appointor is a corporation, either under seal or under the hand of a duly authorised officer or attorney. Every instrument of proxy, whether for a specified meeting or otherwise, shall be in such form as the Board may from time to time approve, provided that it shall not preclude the use of the two-way form. Any form issued to a member for appointing a proxy to attend and vote at an extraordinary general meeting or at an annual general meeting at which any business is to be transacted shall be such as to enable the member, according to his intentions, to instruct the proxy to vote in favour of or against (or, in default of instructions, to exercise his discretion in respect of) each resolution dealing with any such business.

2.6 Accounts and audit

The Board shall cause proper books of account to be kept of the sums of money received and expended by the Company, and of the assets and liabilities of the Company and of all other matters required by the Companies Act (which include all sales and purchases of goods by the company) necessary to give a true and fair view of the state of the Company’s affairs and to show and explain its transactions.

The books of accounts of the Company shall be kept at the head office of the Company or at such other place or places as the Board decides and shall always be open to inspection by any Director. No member (other than a Director) shall have any right to inspect any account, book or document of the Company except as conferred by the Companies Act or ordered by a court of competent jurisdiction or authorised by the Board or the Company in general meeting.

The Board shall from time to time cause to be prepared and laid before the Company at its annual general meeting balance sheets and profit and loss accounts (including every document required by law to be annexed thereto), together with a copy of the Directors’ report and a copy of the auditors’ report, not less than 21 days before the date of the annual general meeting. Copies of these documents shall be sent to every person entitled to receive notices of general meetings of the Company under the provisions of the Articles together with the notice of annual general meeting, not less than 21 days before the date of the meeting.

Subject to the rules of the stock exchange of the Relevant Territory (as defined in the Articles), the Company may send summarized financial statements to shareholders who have, in accordance with the rules of the stock exchange of the Relevant Territory, consented and elected to receive summarised financial statements instead of the full financial statements. The summarized financial statements must be accompanied by any other documents as may be required under the rules of the stock exchange of the Relevant Territory, and must be sent to those shareholders that have consented and elected to receive the summarised financial statements not less than 21 days before the general meeting.

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The Company shall appoint auditor(s) to hold office until the conclusion of the next annual general meeting on such terms and with such duties as may be agreed with the Board. The auditors’ remuneration shall be fixed by the Company in general meeting or by the Board if authority is so delegated by the members.

The members may, at any general meeting convened and held in accordance with the Articles, remove the auditors by special resolution at any time before the expiration of the term of office and shall, by ordinary resolution, at that meeting appoint new auditors in its place for the remainder of the term.

The auditors shall audit the financial statements of the Company in accordance with generally accepted accounting principles of Hong Kong, the International Accounting Standards or such other standards as may be permitted by the Stock Exchange.

2.7 Dividends and other methods of distribution

The Company in general meeting may declare dividends in any currency to be paid to the members but no dividend shall be declared in excess of the amount recommended by the Board.

Except in so far as the rights attaching to, or the terms of issue of, any share may otherwise provide:

(a) all dividends shall be declared and paid according to the amounts paid up on the shares in respect of which the dividend is paid, although no amount paid up on a share in advance of calls shall for this purpose be treated as paid up on the share;

(b) all dividends shall be apportioned and paid pro rata in accordance with the amount paid up on the shares during any portion(s) of the period in respect of which the dividend is paid; and

(c) the Board may deduct from any dividend or other monies payable to any member all sums of money (if any) presently payable by him to the Company on account of calls, instalments or otherwise.

Where the Board or the Company in general meeting has resolved that a dividend should be paid or declared, the Board may resolve:

(i) that such dividend be satisfied wholly or in part in the form of an allotment of shares credited as fully paid up, provided that the members entitled to such dividend will be entitled to elect to receive such dividend (or part thereof) in cash in lieu of such allotment; or

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(ii) that the members entitled to such dividend will be entitled to elect to receive an allotment of shares credited as fully paid up in lieu of the whole or such part of the dividend as the Board may think fit.

Upon the recommendation of the Board, the Company may by ordinary resolution in respect of any one particular dividend of the Company determine that it may be satisfied wholly in the form of an allotment of shares credited as fully paid up without offering any right to members to elect to receive such dividend in cash in lieu of such allotment.

Any dividend, bonus or other sum payable in cash to the holder of shares may be paid by cheque or warrant sent through the post. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent and shall be sent at the holder’s or joint holders’ risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to the Company. Any one of two or more joint holders may give effectual receipts for any dividends or other monies payable or property distributable in respect of the shares held by such joint holders.

Whenever the Board or the Company in general meeting has resolved that a dividend be paid or declared, the Board may further resolve that such dividend be satisfied wholly or in part by the distribution of specific assets of any kind.

The Board may, if it thinks fit, receive from any member willing to advance the same, and either in money or money’s worth, all or any part of the money uncalled and unpaid or instalments payable upon any shares held by him, and in respect of all or any of the monies so advanced may pay interest at such rate (if any) not exceeding 20% per annum, as the Board may decide, but a payment in advance of a call shall not entitle the member to receive any dividend or to exercise any other rights or privileges as a member in respect of the share or the due portion of the shares upon which payment has been advanced by such member before it is called up.

All dividends, bonuses or other distributions unclaimed for one year after having been declared may be invested or otherwise used by the Board for the benefit of the Company until claimed and the Company shall not be constituted a trustee in respect thereof. All dividends, bonuses or other distributions unclaimed for six years after having been declared may be forfeited by the Board and, upon such forfeiture, shall revert to the Company.

No dividend or other monies payable by the Company on or in respect of any share shall bear interest against the Company.

The Company may exercise the power to cease sending cheques for dividend entitlements or dividend warrants by post if such cheques or warrants remain uncashed on two consecutive occasions or after the first occasion on which such a cheque or warrant is returned undelivered.

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2.8 Inspection of corporate records

For so long as any part of the share capital of the Company is listed on the Stock Exchange, any member may inspect any register of members of the Company maintained in Hong Kong (except when the register of members is closed) without charge and require the provision to him of copies or extracts of such register in all respects as if the Company were incorporated under and were subject to the Hong Kong Companies Ordinance.

2.9 Rights of minorities in relation to fraud or oppression

There are no provisions in the Articles concerning the rights of minority members in relation to fraud or oppression. However, certain remedies may be available to members of the Company under Cayman Islands law, as summarized in paragraph 3(f) of this Appendix.

2.10 Procedures on liquidation

A resolution that the Company be wound up by the court or be wound up voluntarily shall be a special resolution.

Subject to any special rights, privileges or restrictions as to the distribution of available surplus assets on liquidation for the time being attached to any class or classes of shares:

(a) if the Company is wound up and the assets available for distribution among the members of the Company are more than sufficient to repay the whole of the capital paid up at the commencement of the winding up, then the excess shall be distributed pari passu among such members in proportion to the amount paid up on the shares held by them respectively; and

(b) if the Company is wound up and the assets available for distribution among the members as such are insufficient to repay the whole of the paid-up capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the members in proportion to the capital paid up on the shares held by them, respectively.

If the Company is wound up (whether the liquidation is voluntary or compelled by the court), the liquidator may, with the sanction of a special resolution and any other sanction required by the Companies Act, divide among the members in specie or kind the whole or any part of the assets of the Company, whether the assets consist of property of one kind or different kinds, and the liquidator may, for such purpose, set such value as he deems fair upon any one or more class or classes of property to be so divided and may determine how such division shall be carried out as between the members or different classes of members and the members within each class. The liquidator may, with the like sanction, vest any part of the assets in trustees upon such trusts for the benefit of members as the liquidator thinks fit, but so that no member shall be compelled to accept any shares or other property upon which there is a liability.

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2.11 Subscription rights reserve

Provided that it is not prohibited by and is otherwise in compliance with the Companies Act, if warrants to subscribe for shares have been issued by the Company and the Company does any act or engages in any transaction which would result in the subscription price of such warrants being reduced below the par value of the shares to be issued on the exercise of such warrants, a subscription rights reserve shall be established and applied in paying up the difference between the subscription price and the par value of such shares.

3 CAYMAN ISLANDS COMPANY LAW

The Company was incorporated in the Cayman Islands as an exempted company on 24 December 2020 subject to the Companies Act. Certain provisions of Cayman Islands company law are set out below but this section does not purport to contain all applicable qualifications and exceptions or to be a complete review of all aspects of the Cayman Islands law and taxation, which may differ from equivalent provisions in jurisdictions with which interested parties may be more familiar.

3.1 Company operations

An exempted company such as the Company must conduct its operations mainly outside the Cayman Islands. An exempted company is also required to file an annual return each year with the Registrar of Companies and pay a fee which is based on the amount of its authorised share capital.

3.2 Share capital

Under the Companies Act, a Cayman Islands company may issue ordinary, preference or redeemable shares or any combination thereof. Where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account, to be called the “share premium account”. At the option of a company, these provisions may not apply to premiums on shares of that company allotted pursuant to any arrangements in consideration of the acquisition or cancellation of shares in any other company and issued at a premium. The share premium account may be applied by the company subject to the provisions, if any, of its memorandum and articles of association, in such manner as the company may from time to time determine including, but without limitation, the following:

(a) paying distributions or dividends to members;

(b) paying up unissued shares of the company to be issued to members as fully paid bonus shares;

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(d) writing-off the preliminary expenses of the company; and

(e) writing-off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company.

Notwithstanding the foregoing, no distribution or dividend may be paid to members out of the share premium account unless, immediately following the date on which the distribution or dividend is proposed to be paid, the company will be able to pay its debts as they fall due in the ordinary course of business.

Subject to confirmation by the court, a company limited by shares or a company limited by guarantee and having a share capital may, if authorised to do so by its articles of association, by special resolution reduce its share capital in any way.

3.3 Financial assistance to purchase shares of a company or its holding company

There are no statutory prohibitions in the Cayman Islands on the granting of financial assistance by a company to another person for the purchase of, or subscription for, its own, its holding company’s or a subsidiary’s shares. Therefore, a company may provide financial assistance provided the directors of the company, when proposing to grant such financial assistance, discharge their duties of care and act in good faith, for a proper purpose and in the interests of the company. Such assistance should be on an arm’s-length basis.

3.4 Purchase of shares and warrants by a company and its subsidiaries

A company limited by shares or a company limited by guarantee and having a share capital may, if so authorised by its articles of association, issue shares which are to be redeemed or are liable to be redeemed at the option of the company or a member and, for the avoidance of doubt, it shall be lawful for the rights attaching to any shares to be varied, subject to the provisions of the company’s articles of association, so as to provide that such shares are to be or are liable to be so redeemed. In addition, such a company may, if authorised to do so by its articles of association, purchase its own shares, including any redeemable shares; an ordinary resolution of the company approving the manner and terms of the purchase will be required if the articles of association do not authorise the manner and terms of such purchase. A company may not redeem or purchase its shares unless they are fully paid. Furthermore, a company may not redeem or purchase any of its shares if, as a result of the redemption or purchase, there would no longer be any issued shares of the company other than shares held as treasury shares. In addition, a payment out of capital by a company for the redemption or purchase of its own shares is not lawful unless, immediately following the date on which the payment is proposed to be made, the company shall be able to pay its debts as they fall due in the ordinary course of business.

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Shares that have been purchased or redeemed by a company or surrendered to the company shall not be treated as cancelled but shall be classified as treasury shares if held in compliance with the requirements of Section 37A(1) of the Companies Act. Any such shares shall continue to be classified as treasury shares until such shares are either cancelled or transferred pursuant to the Companies Act.

A Cayman Islands company may be able to purchase its own warrants subject to and in accordance with the terms and conditions of the relevant warrant instrument or certificate. Thus there is no requirement under Cayman Islands law that a company’s memorandum or articles of association contain a specific provision enabling such purchases. The directors of a company may under the general power contained in its memorandum of association be able to buy, sell and deal in personal property of all kinds.

A subsidiary may hold shares in its holding company and, in certain circumstances, may acquire such shares.

3.5 Dividends and distributions

Subject to a solvency test, as prescribed in the Companies Act, and the provisions, if any, of the company’s memorandum and articles of association, company may pay dividends and distributions out of its share premium account. In addition, based upon English case law which is likely to be persuasive in the Cayman Islands, dividends may be paid out of profits.

For so long as a company holds treasury shares, no dividend may be declared or paid, and no other distribution (whether in cash or otherwise) of the company’s assets (including any distribution of assets to members on a winding up) may be made, in respect of a treasury share.

3.6 Protection of minorities and shareholders’ suits

It can be expected that the Cayman Islands courts will ordinarily follow English case law precedents (particularly the rule in the case of Foss v. Harbottle and the exceptions to that rule) which permit a minority member to commence a representative action against or derivative actions in the name of the company to challenge acts which are ultra vires, illegal, fraudulent (and performed by those in control of the company) against the minority, or represent an irregularity in the passing of a resolution which requires a qualified (or special) majority which has not been obtained.

Where a company (not being a bank) is one which has a share capital divided into shares, the court may, on the application of members holding not less than one-fifth of the shares of the company in issue, appoint an inspector to examine the affairs of the company and, at the direction of the court, to report on such affairs. In addition, any member of a company may petition the court, which may make a winding up order if the court is of the opinion that it is just and equitable that the company should be wound up.

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In general, claims against a company by its members must be based on the general laws of contract or tort applicable in the Cayman Islands or be based on potential violation of their individual rights as members as established by a company’s memorandum and articles of association.

3.7 Disposal of assets

There are no specific restrictions on the power of directors to dispose of assets of a company, however, the directors are expected to exercise certain duties of care, diligence and skill to the standard that a reasonably prudent person would exercise in comparable circumstances, in addition to fiduciary duties to act in good faith, for proper purpose and in the best interests of the company under English common law (which the Cayman Islands’ courts will ordinarily follow).

3.8 Accounting and auditing requirements

A company must cause proper records of accounts to be kept with respect to:

(a) all sums of money received and expended by it;

(b) all sales and purchases of goods by it; and

Proper books of account shall not be deemed to be kept if there are not kept such books as are necessary to give a true and fair view of the state of the company’s affairs and to explain its transactions.

If a company keeps its books of account at any place other than at its registered office or any other place within the Cayman Islands, it shall, upon service of an order or notice by the Tax Information Authority pursuant to the Tax Information Authority Act (as amended) of the Cayman Islands (the “TIA Act”), make available, in electronic form or any other medium, at its registered office copies of its books of account, or any part or parts thereof, as are specified in such order or notice.

3.9 Exchange control

There are no exchange control regulations or currency restrictions in effect in the Cayman Islands.

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3.10 Taxation

Pursuant to Section 6 of the Tax Concessions Act (as amended) of the Cayman Islands (the “Tax Concessions Act”), the Company has obtained an undertaking from the Governor- in-Cabinet that:

(a) no law which is enacted in the Cayman Islands imposing any tax to be levied on profits or income or gains or appreciation shall apply to the Company or its operations; and

(b) no tax be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable by the Company:

(i) on or in respect of the shares, debentures or other obligations of the Company; or

(ii) by way of withholding in whole or in part of any relevant payment as defined in Section 6(3) of the Tax Concessions Act.

The undertaking for the Company is for a period of 30 years from [Date].

The Cayman Islands currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to the Company levied by the Government of the Cayman Islands save for certain stamp duties which may be applicable, from time to time, on certain instruments.

3.11 Stamp duty on transfers

No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands companies save for those which hold interests in land in the Cayman Islands.

3.12 Loans to directors

There is no express provision prohibiting the making of loans by a company to any of its directors. However, the company’s articles of association may provide for the prohibition of such loans under specific circumstances.

3.13 Inspection of corporate records

The members of a company have no general right to inspect or obtain copies of the register of members or corporate records of the company. They will, however, have such rights as may be set out in the company’s articles of association.

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3.14 Register of members

A Cayman Islands exempted company may maintain its principal register of members and any branch registers in any country or territory, whether within or outside the Cayman Islands, as the company may determine from time to time. There is no requirement for an exempted company to make any returns of members to the Registrar of Companies. The names and addresses of the members are, accordingly, not a matter of public record and are not available for public inspection. However, an exempted company shall make available at its registered office, in electronic form or any other medium, such register of members, including any branch register of member, as may be required of it upon service of an order or notice by the Tax Information Authority pursuant to the TIA Act.

3.15 Register of Directors and officers

Pursuant to the Companies Act, the Company is required to maintain at its registered office a register of directors, alternate directors and officers which is not available for inspection by the public. A copy of such register must be filed with the Registrar of Companies and any change must be notified to the Registrar of Companies within 60 days of any change in such directors or officers, including a change of the name of such directors or officers.

3.16 Winding up

A Cayman Islands company may be wound up by:

(a) an order of the court;

(b) voluntarily by its members; or

The court has authority to order winding up in a number of specified circumstances including where, in the opinion of the court, it is just and equitable that such company be so wound up.

A voluntary winding up of a company (other than a limited duration company, for which specific rules apply) occurs where the company resolves by special resolution that it be wound up voluntarily or where the company in general meeting resolves that it be wound up voluntarily because it is unable to pay its debt as they fall due. In the case of a voluntary winding up, the company is obliged to cease to carry on its business from the commencement of its winding up except so far as it may be beneficial for its winding up. Upon appointment of a voluntary liquidator, all the powers of the directors cease, except so far as the company in general meeting or the liquidator sanctions their continuance.

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In the case of a members’ voluntary winding up of a company, one or more liquidators are appointed for the purpose of winding up the affairs of the company and distributing its assets.

As soon as the affairs of a company are fully wound up, the liquidator must make a report and an account of the winding up, showing how the winding up has been conducted and the property of the company disposed of, and call a general meeting of the company for the purposes of laying before it the account and giving an explanation of that account.

When a resolution has been passed by a company to wind up voluntarily, the liquidator or any contributory or creditor may apply to the court for an order for the continuation of the winding up under the supervision of the court, on the grounds that:

(a) the company is or is likely to become insolvent; or

(b) the supervision of the court will facilitate a more effective, economic or expeditious liquidation of the company in the interests of the contributories and creditors.

A supervision order takes effect for all purposes as if it was an order that the company be wound up by the court except that a commenced voluntary winding up and the prior actions of the voluntary liquidator shall be valid and binding upon the company and its official liquidator.

For the purpose of conducting the proceedings in winding up a company and assisting the court, one or more persons may be appointed to be called an official liquidator(s).The court may appoint to such office such person or persons, either provisionally or otherwise, as it thinks fit, and if more than one person is appointed to such office, the court shall declare whether any act required or authorized to be done by the official liquidator is to be done by all or any one or more of such persons. The court may also determine whether any and what security is to be given by an official liquidator on his appointment; if no official liquidator is appointed, or during any vacancy in such office, all the property of the company shall be in the custody of the court.

3.17 Reconstructions

Reconstructions and amalgamations may be approved by a majority in number representing 75% in value of the members or creditors, depending on the circumstances, as are present at a meeting called for such purpose and thereafter sanctioned by the courts. Whilst a dissenting member has the right to express to the court his view that the transaction for which approval is being sought would not provide the members with a fair value for their shares, the courts are unlikely to disapprove the transaction on that ground alone in the absence of evidence of fraud or bad faith on behalf of management, and if the transaction were approved and consummated the dissenting member would have no rights comparable to the appraisal rights (i.e. the right to receive payment in cash for the judicially determined value of their shares) ordinarily available, for example, to dissenting members of a United States corporation.

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3.18 Take-overs

Where an offer is made by a company for the shares of another company and, within four months of the offer, the holders of not less than 90% of the shares which are the subject of the offer accept, the offeror may, at any time within two months after the expiration of that four-month period, by notice require the dissenting members to transfer their shares on the terms of the offer. A dissenting member may apply to the Cayman Islands’ courts within one month of the notice objecting to the transfer. The burden is on the dissenting member to show that the court should exercise its discretion, which it will be unlikely to do unless there is evidence of fraud or bad faith or collusion as between the offeror and the holders of the shares who have accepted the offer as a means of unfairly forcing out minority members.

3.19 Indemnification

Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, save to the extent any such provision may be held by the court to be contrary to public policy, for example, where a provision purports to provide indemnification against the consequences of committing a crime.

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A. FURTHER INFORMATION ABOUT OUR COMPANY

1. Incorporation of our Company

Our Company was incorporated in the Cayman Islands under the Companies Act as an exempted company with limited liability on December 24, 2020. Our Company has established its principal place of business in Hong Kong at 40th Floor, Dah Sing Financial Centre, 248 Queen’ Road East, Wanchai, Hong Kong and was registered with the Registrar of Companies in Hong Kong as a non-Hong Kong company under Part 16 of the Companies Ordinance on April 20, 2021. Ms. Mak Po Man Cherie has been appointed as the authorized representative of our Company for the acceptance of service of process and notices in Hong Kong.

As our Company was incorporated in the Cayman Islands, its operations are subject to the Cayman Companies Act and to its constitution, which comprises of the Memorandum and Articles of Association. A summary of certain provisions of the Memorandum and Articles of Association and relevant aspects of the Cayman Companies Act is set out in “Summary of the Constitution of the Company and Cayman Islands Company Law” in Appendix III to this Document.

2. Changes in the share capital of our Company

As of the date of incorporation of our Company, the authorized share capital of our Company was HK$380,000 divided into 38,000,000 ordinary shares with a par value of HK$0.01 each. Upon its incorporation, one share of par value HK$0.01 was allotted and issued at par to an initial subscriber, being an Independent Third Party, which was transferred at par, fully paid to Sun Arise on the same date.

On December 24, 2020, one Share was allotted and issued at par, fully paid to each of Virtuous Charm, Prime Elegance, Jade Concord, Active Strength and Grand Favour.

On March 17, 2021, our Company allotted and issued 4,499, 4,999, 39,999, 4,499, 4,999 and 39,999 Shares at par, fully paid to Jade Concord, Virtuous Charm, Prime Elegance, Grand Favour, Active Strength and Sun Arise, respectively.

On April 13, 2021, our Company allotted and issued 500 Shares, credited as fully paid, to each of Jade Concord and Grand Favour.

Pursuant to the written resolutions of our Shareholders passed on [●], 2021, the authorized share capital of our Company was increased from HK$380,000 divided into 38,000,000 Shares of a par value of HK$0.01 each to HK$[50,000,000] divided into [5,000,000,000] Shares of a par value of HK$0.01 each by the creation of additional 4,962,000,000 Shares.

Immediately following completion of the Capitalization Issue and the [REDACTED] and without taking into account any Shares which may be issued upon the exercise of the [REDACTED], the issued share capital of our Company will be HK$[REDACTED] divided into [REDACTED] Shares, all fully paid or credited as fully paid, and [REDACTED] Shares will remain unissued.

Save for the aforesaid and as mentioned in the paragraph headed “– 3. Written resolutions of our Shareholders passed on [●], 2021” below in this Appendix, there has been no alteration in the share capital of our Company since its incorporation.

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3. Written resolutions of our Shareholders passed on [●], 2021

Pursuant to written resolutions of our Shareholders passed on [●], 2021, among other matters:

(i) our Company approved and conditionally adopted the Memorandum of Association and the Articles of Association which will become effective upon [REDACTED];

(ii) the authorized share capital of our Company was increased from HK$380,000 divided into 38,000,000 Shares to HK$[50,000,000] divided into [5,000,000,000] Shares by creation of an additional [4,962,000,000] Shares with immediate effect. Such Shares shall rank pari passu with the Shares then in issue in all aspects;

(iii) conditional on (i) the Listing Committee granting the [REDACTED] of, and permission to deal in, the Shares in issue and Shares to be allotted and issued pursuant to the Capitalization Issue and the [REDACTED] and Shares to be issued as mentioned in this Document (including any additional Shares which may be allotted and issued pursuant to the exercise of the [REDACTED] or options which may be granted under the Share Option Scheme); (ii) the entering into of the agreement on the [REDACTED] between the [REDACTED] (for themselves and on behalf of the [REDACTED]) and our Company on the [REDACTED]; (iii) the obligations of the [REDACTED] under the [REDACTED] becoming unconditional and not being terminated in accordance with the terms therein or otherwise, in each case on or before such dates as may be specified in the [REDACTED]:

(1) the [REDACTED] was approved and our Directors were authorized to allot and issue the new Shares pursuant to the [REDACTED];

(2) the [REDACTED] was approved;

(3) the rules of the Share Option Scheme, the principal terms of which are set out in the sub-paragraph headed “D. Other Information—1. Share Option Scheme” below in this Appendix, were approved and adopted and our Directors were authorized, at their absolute discretion, to grant options to subscribe for Shares thereunder and to allot, issue and deal with Shares pursuant to the exercise of any options which may be granted under the Share Option Scheme and to take all actions as they consider necessary or desirable to implement the Share Option Scheme; and

(4) conditional on the share premium account of our Company being credited as a result of the Shares by our Company pursuant to the [REDACTED], our Directors were authorized to capitalize an amount of HK$[REDACTED] standing to the credit of the share premium account of our Company by applying such sum in paying up in full at par [REDACTED] Shares.

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(iv) a general unconditional mandate was given to our Directors to allot, issue and deal with (including the power to make an offer or agreement, or grant securities which would or might require Shares to be allotted and issued), otherwise than pursuant to a rights issue or pursuant to any scrip dividend schemes or similar arrangements providing for the allotment and issue of Shares in lieu of the whole or part of a dividend on Shares in accordance with the Articles of Association or other similar arrangements or pursuant to a specific authority granted by the Shareholders in general meeting, unissued Shares not exceeding the aggregate of 20% of the number of issued Shares immediately following the completion of the Capitalization Issue and the [REDACTED] (but taking no account of any Shares which may be allotted and issued pursuant to the exercise of the [REDACTED] or options which may be granted under the Share Option Scheme), such mandate to remain in effect until the conclusion of the next annual general meeting of our Company, or the expiration of the period within which the next annual general meeting of our Company is required by the Articles of Association or any applicable laws to be held, or until revoked or varied by an ordinary resolution of the Shareholders in general meeting, whichever occurs first;

(v) a general unconditional mandate was given to our Directors authorizing them to exercise all powers of our Company to repurchase on the Stock Exchange or on any other approved stock exchange on which the securities of our Company may be [REDACTED] and which is recognized by the SFC and the Stock Exchange for this purpose such number of Shares as will represent up to 10% of the number of issued Shares immediately following the completion of the Capitalization Issue and the [REDACTED] (but taking no account of any Shares which may be allotted and issued pursuant to the exercise of the [REDACTED] or options which may be granted under the Share Option Scheme), such mandate to remain in effect until the conclusion of the next annual general meeting of our Company, or the expiration of the period within which the next annual general meeting of our Company is required by the Articles of Association or any applicable laws to be held, or until revoked or varied by an ordinary resolution of the Shareholders in general meeting, whichever occurs first; and

(vi) the general unconditional mandate mentioned in paragraph (iv) above was extended by the addition to the number of issued Shares which may be allotted and issued or agreed conditionally or unconditionally to be allotted and issued by our Directors pursuant to such general mandate of an amount representing the total number of issued Shares repurchased by our Company pursuant to the mandate to repurchase Shares referred to in paragraph (v) above.

4. Corporate Reorganization

In preparation for the [REDACTED] of our Shares on the Stock Exchange, the companies comprising our Group underwent the Reorganization and our Company became the holding company of our Group. For information with regard to the Reorganization, please see the section entitled “History, Reorganization and Corporate Structure” in this Document.

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5. Changes in Share Capital of Our Subsidiaries

Our Company’s subsidiaries are referred to in the Accountant’s Report in Appendix I to this Document. Save as the subsidiaries mentioned in the Accountant’s Report and the section headed “History, Reorganization and Corporate Structure”, our Company has no other subsidiaries.

The following change in the registered capital of our subsidiary has taken place within the two years immediately preceding the date of this document:

Tianli Property

On December 10, 2019, the registered capital of Tianli Property was increased from RMB5,000,000 to RMB300,000,000.

Save as set out above and disclosed in the section headed “History, Reorganization and Corporate Structure”, there are no other changes in registered capital of our subsidiaries within the two years immediately preceding the date of this Document.

6. Repurchases of our Shares

(a) Provisions of the Listing Rules

The Listing Rules permit companies with a primary [REDACTED] on the Stock Exchange to repurchase their securities on the Stock Exchange subject to certain restrictions, the more important of which are summarized below:

(i) Shareholders’ approval

All proposed repurchases of securities (which must be fully paid up in the case of shares) by a company [REDACTED] on the Stock Exchange must be approved in advance by an ordinary resolution of the shareholders, either by way of general mandate or by specific approval of a particular transaction.

Note: Pursuant to the written resolutions passed by the Shareholders of our Company on [●], 2021, a general unconditional mandate (the “Buyback Mandate”) was granted to our Directors authorizing the repurchase of shares by our Company on the Stock Exchange, or on any other stock exchange on which the securities of our Company may be [REDACTED] and which is recognized by the SFC and the Stock Exchange for this purpose, with the total number of Shares not exceeding 10% of the total number of Shares in issue and to be issued as mentioned herein, at any time until the conclusion of the next annual general meeting of our Company, the expiration of the period within which the next annual general meeting of our Company is required by an applicable law or the Articles to be held or when such mandate is revoked or varied by an ordinary resolution of our Shareholders in general meeting, whichever occurs first.

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(ii) Source of funds

Repurchases must be funded out of funds legally available for the purpose in accordance with the Articles of Association, the Listing Rules, the laws of Cayman Islands and other applicable laws and regulations. A [REDACTED] company may not repurchase its own securities on the Stock Exchange for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange in effect from time to time.

(iii) Connected persons

A[REDACTED] company is prohibited from knowingly repurchasing its securities on the Stock Exchange from a “core connected person”, that is, a director, chief executive or substantial shareholder of the company or any of its subsidiaries or their close associates and a core connected person is prohibited from knowingly selling his securities to the company.

(b) Reasons for Repurchases

Our Directors believe that it is in the best interests of our Company and Shareholders for our Directors to have general authority from the Shareholders to enable our Directors to repurchase Shares in the market. Repurchases of Shares will only be made when our Directors believe that such repurchases will benefit our Company and its members. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value of our Company and its assets and/or its earnings per Share.

In repurchasing securities, our Company may only apply funds legally available for such purpose in accordance with the Articles of Association, the Listing Rules and the applicable laws of the Cayman Islands.

It is presently proposed that any repurchase of Shares will be made out of the profits of our Company, the share premium amount of our Company or the proceeds of a fresh issue of Shares made for the purpose of the repurchase or, if so authorized by the Memorandum and Articles of Association and subject to the applicable laws of the Cayman Islands, out of capital and, in the case of any premium payable on the purchase over the par value of the Shares to be repurchased must be provided for, out of either or both of the profits of our Company or from sums standing to the credit of the share premium account of our Company or, if so authorized by the Articles of Association and subject to the Cayman Islands Companies Act, out of capital.

–IV-5– 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. APPENDIX IV STATUTORY AND GENERAL INFORMATION

Our Directors do not propose to exercise the Buyback Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements of our Company or its gearing levels which, in the opinion of our Directors, are from time to time appropriate for our Company. However, there might be a material adverse impact on the working capital or gearing level as compared with the position disclosed in this Document in the event that the Buyback Mandate is exercised in full.

(d) Share Capital

Exercise in full of the Buyback Mandate, on the basis of [REDACTED] Shares in issue immediately after the [REDACTED] (without taking into account the Shares which may be issued pursuant to the exercise of the [REDACTED] or options which may be granted under the Share Option Scheme), could accordingly result in up to [REDACTED] Shares being repurchased by our Company during the period until:

(i) the conclusion of the next annual general meeting of our Company;

(ii) the expiration of the period within which the next annual general meeting of our Company is required by any applicable law or the Articles of Association to be held; or

(iii) the date on which the Buyback Mandate is revoked or varied by an ordinary resolution of our Shareholders in general meeting, whichever occurs first.

(e) General

None of our Directors nor, to the best of their knowledge, information and belief, having made all reasonable enquiries, any of their close associates, currently intends to sell any Shares to our Company or our subsidiaries.

Our Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the Buyback Mandate in accordance with the Listing Rules, the Memorandum and Articles of Association, the applicable laws of the Cayman Islands.

If, as a result of a securities repurchase pursuant to the Buyback Mandate, a Shareholder’s proportionate interest in the voting rights of our Company is increased, such increase will be treated as an acquisition for the purpose of the Code on Takeovers and Mergers (the “Takeovers Code”). Accordingly, a Shareholder or a group of Shareholders acting in concert, depending on the level of increase of the Shareholders’ interest, could obtain or consolidate control of our Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code as a result of any such increase. Save for the foregoing, our Directors are not aware of any consequences which would arise under the Takeovers Code as a consequence of any repurchases pursuant to the Buyback Mandate.

–IV-6– 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. APPENDIX IV STATUTORY AND GENERAL INFORMATION

Any repurchase of Shares that results in the number of Shares held by the public being reduced to less than 25% of our Shares then in issue (or such other percentage as may be prescribed as the minimum public shareholding under the Listing Rules) could only be implemented if the Stock Exchange agreed to waive the Listing Rules requirements regarding the public shareholding referred to above. It is believed that a waiver of this provision would not normally be given other than in exceptional circumstances.

No core connected person of our Company has notified our Company that he/she/it has any present intention to sell Shares to our Company, or has undertaken not to do so if the Buyback Mandate is exercised.

–IV-7– 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. APPENDIX IV STATUTORY AND GENERAL INFORMATION

B. INFORMATION ABOUT OUR BUSINESS

1. Summary of Material Contracts

The following contracts (not being contracts entered into in the ordinary course of business) have been entered into by our Company or any of its subsidiaries within the two years preceding the date of this Document that are or may be material:

(a) an equity transfer agreement dated December 23, 2019 entered into between Datong Fulicheng Property Development Co., Ltd. (大同富力城房地產開發有限公司) and Guangzhou Fuxing Investment Consulting Co., Ltd. (廣州富星投資諮詢有限公司), pursuant to which Datong Fulicheng Property Development Co., Ltd. (大同富力城房地產開發有限公司) agreed to transfer its 100% equity interest in Datong Hengfu Property Service Co., Ltd. (大同恆富物業服務有限公司) to Guangzhou Fuxing Investment Consulting Co., Ltd. (廣州富星投資諮詢有限公司) at a consideration of RMB5,000,000;

(b) an equity transfer agreement dated December 30, 2019 entered into between Tianjin Yaohua Investment Development Co., Ltd. (天津耀華投資發展有限公司) and Guangzhou Fuxing Investment Consulting Co., Ltd. (廣州富星投資諮詢有限公司), pursuant to which Tianjin Yaohua Investment Development Co., Ltd. (天津耀華投資發展有限公司) agreed to transfer its 90% equity interest in Tianjin Huaxin Property Management Co., Ltd. (天津華信物業管理有限公司) to Guangzhou Fuxing Investment Consulting Co., Ltd. (廣州富星投資諮詢有限公司) at a consideration of RMB4,500,000;

(c) an equity transfer agreement dated December 30, 2019 entered into between Tianjin Fulicheng Property Development Co., Ltd. (天津富力城房地產開發有限公司) and Guangzhou Fuxing Investment Consulting Co., Ltd. (廣州富星投資諮詢有限公司), pursuant to which Tianjin Fulicheng Property Development Co., Ltd. (天津富力城房地產開發有限公司) agreed to transfer its 10% equity interest in Tianjin Huaxin Property Management Co., Ltd. (天津華信物業管理有限公司) to Guangzhou Fuxing Investment Consulting Co., Ltd. (廣州富星投資諮詢有限公司) at a consideration of RMB500,000;

(d) an equity transfer agreement dated March 31, 2020 entered into between Guangzhou R&F Properties Co., Ltd. (廣州富力地產股份有限公司) and Guangzhou Fuxing Investment Consulting Co., Ltd. (廣州富星投資諮詢有限公司), pursuant to which Guangzhou R&F Properties Co., Ltd. (廣州富力地產股份有限公司) agreed to transfer its 90% equity interest in Guangzhou Tianli Property Development Co., Ltd. (廣州天力物業發展有限公司) to Guangzhou Fuxing Investment Consulting Co., Ltd. (廣州富星投資諮詢有限公司) at a consideration of RMB270,000,000;

–IV-8– 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. APPENDIX IV STATUTORY AND GENERAL INFORMATION

(e) an equity transfer agreement dated March 31, 2020 entered into between Guangzhou Dingli Venture Investment Co., Ltd. (廣州鼎力創業投資有限公司) and Guangzhou Fuxing Investment Consulting Co., Ltd. (廣州富星投資諮詢有限公司), pursuant to which Guangzhou Dingli Venture Investment Co., Ltd. (廣州鼎力創業投資有限公司) agreed to transfer its 10% equity interest in Guangzhou Tianli Property Development Co., Ltd. (廣州天力物業發展有限公司) to Guangzhou Fuxing Investment Consulting Co., Ltd. (廣州富星投資諮詢有限公司) at a consideration of RMB30,000,000;

(f) the Deed of Indemnity; and

(g) the [REDACTED].

2. Intellectual property rights of our Group

(a) Trademarks

As of the Latest Practicable Date, our Group was the registered owner of the following trademark which, in the opinion of our Directors, is or may be material to our business:

Name of Registration Registered Place of Date of Date of Trademark Number Class Owner Registration Registration Expiry

16739082 36 Tianli Property PRC July 14, 2016 July 13, 2026

–IV-9– 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. APPENDIX IV STATUTORY AND GENERAL INFORMATION

As of the Latest Practicable Date, our Group has applied for the registration of the following trademarks which, in the opinion of our Directors, are material to our Group’s business:

Application Name of Place of Application Trademark Number Class applicant Registration Date

305426019 7/16/20/ Guangzhou Hong Kong October 22, 24/32/33/ Fuxing 2020 35/36/37/ 38/40/41/ 42/43/45 305425993 7/9/16/20/ Guangzhou Hong Kong October 22, 24/32/33/ Fuxing 2020 35/36/37/ 38/39/40/ 41/42/43/ 44/45 50613186 35 Guangzhou PRC October 21, Fuxing 2020 50591748 36 Guangzhou PRC October 21, Fuxing 2020 50589699 37 Guangzhou PRC October 21, Fuxing 2020 50587707 39 Guangzhou PRC October 21, Fuxing 2020 50606073 41 Guangzhou PRC October 21, Fuxing 2020 50602742 43 Guangzhou PRC October 21, Fuxing 2020 50594389 44 Guangzhou PRC October 21, Fuxing 2020 50612331 45 Guangzhou PRC October 21, Fuxing 2020 50608561 16 Guangzhou PRC October 21, Fuxing 2020 50612778 20 Guangzhou PRC October 21, Fuxing 2020 50586309 24 Guangzhou PRC October 21, Fuxing 2020 50596681 32 Guangzhou PRC October 21, Fuxing 2020 50587258 33 Guangzhou PRC October 21, Fuxing 2020

– IV-10 – 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. APPENDIX IV STATUTORY AND GENERAL INFORMATION

Application Name of Place of Application Trademark Number Class applicant Registration Date

50587285 35 Guangzhou PRC October 21, Fuxing 2020 50598495 36 Guangzhou PRC October 21, Fuxing 2020 50607163 37 Guangzhou PRC October 21, Fuxing 2020 50591227 38 Guangzhou PRC October 21, Fuxing 2020 50592460 40 Guangzhou PRC October 21, Fuxing 2020 50596224 41 Guangzhou PRC October 21, Fuxing 2020 50605252 42 Guangzhou PRC October 21, Fuxing 2020 50602748 43 Guangzhou PRC October 21, Fuxing 2020 50589324 45 Guangzhou PRC October 21, Fuxing 2020 50605289 7 Guangzhou PRC October 21, Fuxing 2020 50616710 35 Guangzhou PRC October 21, Fuxing 2020 50609423 36 Guangzhou PRC October 21, Fuxing 2020 50601126 41 Guangzhou PRC October 21, Fuxing 2020 50616715 35 Guangzhou PRC October 21, Fuxing 2020 50604336 36 Guangzhou PRC October 21, Fuxing 2020 50601130 41 Guangzhou PRC October 21, Fuxing 2020

–IV-11– 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. APPENDIX IV STATUTORY AND GENERAL INFORMATION

As of the Latest Practicable Date, our Group had been licensed to use the following trademarks which, in the opinion of our Directors, are material to our Group’s business:

Name of Registration Registered Place of Date of Trademark Number Class Proprietor Registration Registration Expiry Date

24445850 9 R&F Properties PRC September 14, September 13, 2018 2028 24452251 35 R&F Properties PRC May 28, 2018 May 27, 2028

24448880 36 R&F Properties PRC May 28, 2018 May 27, 2028

24450839 37 R&F Properties PRC May 28, 2018 May 27, 2028

24448923 38 R&F Properties PRC May 28, 2018 May 27, 2028

24450862 39 R&F Properties PRC June 7, 2018 June 6, 2028

24453132 41 R&F Properties PRC May 28, 2018 May 27, 2028

24445598 42 R&F Properties PRC September 14, September 13, 2018 2028 24445613 43 R&F Properties PRC May 28, 2018 May 27, 2028

24445625 44 R&F Properties PRC May 28, 2018 May 27, 2028

24445638 45 R&F Properties PRC May 28, 2018 May 27, 2028

24424056 9 R&F Properties PRC September 14, September 13, 2018 2028

24421157 35 R&F Properties PRC July 7, 2019 July 6, 2029

24421173 36 R&F Properties PRC September 14, September 13, 2018 2028

24431774 37 R&F Properties PRC September 14, September 13, 2018 2028

24424137 38 R&F Properties PRC September 14, September 13, 2018 2028

24426450 39 R&F Properties PRC June 7, 2018 June 6, 2028

– IV-12 – 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. APPENDIX IV STATUTORY AND GENERAL INFORMATION

Name of Registration Registered Place of Date of Trademark Number Class Proprietor Registration Registration Expiry Date

24430101 41 R&F Properties PRC June 7, 2018 June 6, 2028

24431841 42 R&F Properties PRC September 14, September 13, 2018 2028

24430124 43 R&F Properties PRC June 7, 2018 June 6, 2028

24430141 44 R&F Properties PRC June 7, 2018 June 6, 2028

24425621 45 R&F Properties PRC September 14, September 13, 2018 2028

(b) Domain name

As of the Latest Practicable Date, our Group was the registered proprietor of the following domain name which, in the opinion of our Directors, is material to our Group’s business:

Date of Domain Name Registrant Registration Expiry Date

rf-living.com Tianli Property March 15, February 25, 2021 2022

– IV-13 – 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. APPENDIX IV STATUTORY AND GENERAL INFORMATION

C. FURTHER INFORMATION ABOUT OUR DIRECTORS AND SUBSTANTIAL SHAREHOLDERS

1. Directors

(a) Disclosure of Interests – Interests and short positions of our Directors and chief executives of our Company in the shares, underlying shares and debentures of our Company and our associated corporations

Immediately following completion of the Capitalization Issue and the [REDACTED] (without taking into account any Shares which may be issued pursuant to the exercise of the [REDACTED] or options which may be granted under the Share Option Scheme), the interests or short positions of our Directors or chief executives of our Company, underlying shares or debentures of our Company or our associated corporations (within the meaning of Part XV of the SFO) which will be required to be notified to our Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO) or which will be required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which will be required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers to be notified to our Company and the Stock Exchange, once the Shares are [REDACTED] will be as follows:

Interest in our Company

Approximate Number of percentage of Name of Director Nature of Interest Shares held(1) shareholding

Mr. Li(2)(3)(4) Interests in controlled [REDACTED] [REDACTED]% corporation Shares (L)

Mr. Zhang(5)(6)(7) Interests in controlled [REDACTED] [REDACTED]% corporation Shares (L)

Notes:

(1) The letter “L” denotes the person’s long position in our Shares.

(2) Prime Elegance is directly wholly owned by Mr. Li. By virtue of the SFO, Mr. Li is deemed to be interested in the Shares held by Prime Elegance.

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(5) Sun Arise is directly wholly owned by Mr. Zhang. By virtue of the SFO, Mr. Zhang is deemed to be interested in the Shares held by Sun Arise.

(b) Particulars of service contracts and letters of appointment

Each of our executive Directors [has entered] into a service agreement with our Company for a term of three years commencing from the [REDACTED], which may be terminated by not less than three months’ notice in writing served by either party on the other.

Each of our non-executive Directors and independent non-executive Directors [has entered] into a letter of appointment with our Company for a term of three years commencing from the [REDACTED], which may be terminated by not less than three months’ notice in writing served by either party on the other.

During each of the three years ended December 31, 2020, the aggregate remuneration (including fees, salaries, contributions to pension schemes, bonus, share-based payments, retirement benefits scheme, allowances and other benefits in kind) paid to our Directors was nil. For details, see note 29 of the Accountant’s Report set out in Appendix I to this Document.

Each of our independent non-executive Directors [has been] appointed for a term of three years. Save for directors’ fees, none of our independent non-executive Directors is expected to receive any other remuneration for holding their office as an independent non-executive Director.

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2. Substantial Shareholders

Save as disclosed in “Substantial Shareholders” in this Document, so far as our Directors are aware, immediately following the completion of the Capitalization Issue and the [REDACTED] (without taking into account any Shares which may be issued pursuant to the exercise of the [REDACTED] or options which may be granted under the Share Option Scheme), no person (other than our Directors and chief executives of our Company) will have an interest and/or short positions in our Shares or underlying Shares which would be required to be disclosed to us and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who is, directly or indirectly, interested in 10% or more of the issued voting shares of any other member of our Group.

3. Agency Fees or Commissions Received

No commissions, discounts, brokerages or other special terms were granted in connection with the issue or sale of any capital of any member of our Group within the two years immediately preceding the date of this Document.

4. Disclaimers

Save as disclosed in this Document

(a) none of our Directors or chief executives of our Company has any interest or short position in our shares, underlying shares or debentures of our Company or any of its associated corporation (within the meaning of the SFO) which will have to be notified to our Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO or which will be required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which will be required to be notified to our Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers once the Shares are [REDACTED];

(b) none of our Directors or experts referred to under the paragraph headed “– D. Other information – 8. Qualification of Experts” in this Appendix has any direct or indirect interest in the promotion of our Company, or in any assets which have within the two years immediately preceding the date of this Document been acquired or disposed of by or leased to any member of our Group, or are proposed to be acquired or disposed of by or leased to any member of our Group;

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(c) none of our Directors is materially interested in any contract or arrangement subsisting at the date of this Document which is significant in relation to the business of our Group taken as a whole;

(d) none of our Directors has any existing or proposed service contracts with any member of our Group (excluding contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation));

(e) taking no account of Shares which may be taken up under the [REDACTED], none of our Directors knows of any person (not being a Director or chief executive of our Company) who will, immediately following completion of the [REDACTED], have an interest or short position in our Shares or underlying Shares of our Company which would fall to be disclosed to our Company under the provisions of Divisions 2 and 3 of Part XV of SFO or be interested, directly or indirectly, in 10% or more of the issued voting shares of any member of our Group;

(f) none of the experts referred to under the paragraph headed “– D. Other information – 8. Qualification of Experts” in this Appendix has any shareholding in any member of our Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of our Group; and

(g) so far as is known to our Directors as of the Latest Practicable Date, none of our Directors, their respective close associates (as defined under the Listing Rules) or Shareholders who are interested in more than 5% of the issued share capital of our Company has any interests in the five largest customers or the five largest suppliers of our Group save as disclosed in this Document.

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D. OTHER INFORMATION

1. Share Option Scheme

The following is a summary of the principal terms of the Share Option Scheme conditionally adopted by the written resolutions of our Shareholders passed on [●], 2021.

(a) Purpose

The Share Option Scheme is a share incentive scheme prepared in accordance with Chapter 17 of the Listing Rules and is established to recognize and acknowledge the contributions that the Eligible Participants (as defined in paragraph (b) below) had or may have made to our Group. The Share Option Scheme will provide the Eligible Participants an opportunity to have a personal stake in our Company with the view to achieving the following objectives:

(i) motivate the Eligible Participants to optimize their performance efficiency for the benefit of our Group; and

(ii) attract and retain or otherwise maintain an on-going business relationship with the Eligible Participants whose contributions are or will be beneficial to the long-term growth of our Group.

(b) Who may join

The Board may, at its discretion, offer to grant an option to the following persons (collectively the “Eligible Participants”) to subscribe for such number of new Shares as the Board may determine at an exercise price determined in accordance with paragraph (f) below:

(i) any full-time or part-time employees, executives or officers of our Company or any of its subsidiaries;

(ii) any directors (including independent non-executive Directors) of our Company or any of its subsidiaries; and

(iii) any advisors, consultants, suppliers, customers, distributors and such other persons who, in the sole opinion of the Board, will contribute or have contributed to our Company and/or any of its subsidiaries.

Upon acceptance of the option, the grantee shall pay HK$1.00 to our Company by way of consideration for the grant.

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An option shall be deemed to have been granted and accepted by the grantee and to have taken effect when the duplicate offer document constituting acceptances of the options duly signed by the grantee, together with a remittance or payment in favor of our Company of HK$1.00 by way of consideration for the grant thereof, is received by our Company on or before the relevant acceptance date. Such remittance or payment shall in no circumstances be refundable. Any offer to grant an option to subscribe for Shares may be accepted in respect of less than the number of Shares for which it is offered provided that it must be accepted in respect of a board lot for dealing in Shares on the Stock Exchange or an integral multiple thereof and such number is clearly stated in the duplicate offer document constituting acceptance of the option. To the extent that the offer to grant an option is not accepted by any prescribed acceptance date, it shall be deemed to have been irrevocably declined.

Subject to paragraphs (l), (m), (n), (o) and (p), an option shall be exercised in whole or in part and, other than where it is exercised to the full extent outstanding, shall be exercised in integral multiples of such number of Shares as shall represent one board lot for dealing in Shares on the Stock Exchange for the time being, by the grantee by giving notice in writing to our Company stating that the option is thereby exercised and the number of Shares in respect of which it is exercised. Each such notice must be accompanied by a remittance or payment for the full amount of the exercise price for our Shares in respect of which the notice is given. Within 21 days after receipt of the notice and the remittance or payment and, where appropriate, receipt of the certificate by the auditors to our Company or the approved independent financial advisor as the case may be pursuant to paragraph (r), our Company shall allot and issue the relevant number of Shares to the grantee credited as fully paid and issue to the grantee certificates in respect of our Shares so allotted.

The exercise of any option shall be subject to our Shareholders in general meeting approving any necessary increase in the authorized share capital of our Company.

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(d) Maximum number of Shares

The maximum number of Shares in respect of which options may be granted under the Share Option Scheme and under any other share option schemes of our Company must not in aggregate exceed 10% of the total number of Shares in issue immediately following completion of the Capitalization Issue and the [REDACTED], being [REDACTED] Shares (excluding any Shares which may be issued pursuant to the exercise of the [REDACTED]), excluding for this purpose Shares which would have been issuable pursuant to options which have lapsed in accordance with the terms of the Share Option Scheme (or any other share option schemes of our Company). Subject to the issue of a circular by our Company and the approval of our Shareholders in general meeting in compliance with Rules 17.03(3) and 17.06 of the Listing Rules and/or such other requirements prescribed under the Listing Rules from time to time, the Board may:

(i) renew this limit at any time to 10% of our Shares in issue as at the date of the approval by our Shareholders in general meeting; and/or

(ii) grant options beyond the 10% limit to Eligible Participants specifically identified by the Board. The circular to be issued by our Company to our Shareholders shall contain a generic description of the specified Eligible Participants who may be granted such options, the number and terms of the options to be granted, the purpose of granting options to the specified Eligible Participants with an explanation as to how the options serve such purpose, the information required under Rule 17.02(2)(d) and the disclaimer required under Rule 17.02(4) of the Listing Rules.

Notwithstanding the foregoing and subject to paragraph (r) below, the maximum number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the Share Option Scheme and any other share option schemes of our Company at any time shall not exceed 30% of our Shares in issue from time to time. No options shall be granted under any schemes of our Company (including the Share Option Scheme) if this will result in the 30% limit being exceeded. The maximum number of Shares in respect of which options may be granted shall be adjusted, in such manner as the auditors of our Company or an approved independent financial advisor shall certify to be appropriate, fair and reasonable in the event of any alteration in the capital structure of our Company in accordance with paragraph (r) below whether by way of capitalization issue, rights issue, sub-division or consolidation of Shares or reduction of the share capital of our Company but in no event shall exceed the limit prescribed in this paragraph.

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(e) Maximum number of options to any one individual

The total number of Shares issued and which may fall to be issued upon exercise of the options granted under the Share Option Scheme and any other share option schemes of our Company (including both exercised and outstanding options) to each Eligible Participant in any 12-month period up to the date of grant shall not exceed 1% of our Shares in issue as at the date of grant. Any further grant of options in excess of this 1% limit shall be subject to:

(i) the issue of a circular by our Company to our Shareholders which shall comply with Rules 17.03(4) and 17.06 of the Listing Rules and/or such other requirements as prescribed under the Listing Rules from time to time. The circular to be issued by our Company shall contain the identity of the Eligible Participant, the numbers of and terms of the options to be granted (and options previously granted to such participant), the information as required under Rules 17.02(2)(c) and (d) and the disclaimer required under 17.02(4) of the Listing Rules; and

(ii) the approval of our Shareholders in general meeting and/or other requirements prescribed under the Listing Rules from time to time with such Eligible Participant and his/her close associates (as defined in the Listing Rules) (or his/her associates if the Eligible Participant is a connected person(as defined in the Listing Rules)) abstaining from voting. The numbers and terms (including the exercise price) of options to be granted to such participant must be fixed before our Shareholders’ approval and the date of the Board meeting at which the Board proposes to grant the options to such Eligible Participant shall be taken as the date of grant for the purpose of calculating the subscription price of our Shares. The Board shall forward to such Eligible Participant an offer document in such form as the Board may from time to time determine which states (or, alternatively, documents accompanying the offer document which state), among others:

(aa) the Eligible Participant’s name, address and occupation;

(bb) the date on which an option is offered to an Eligible Participant which must be a date on which the Stock Exchange is open for the business of dealing in securities;

(cc) the date upon which an offer for an option must be accepted;

(dd) the date upon which an option is deemed to be granted and accepted in accordance with paragraph (c) above;

(ee) the number of Shares in respect of which the option is offered;

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(ff) the subscription price and the manner of payment of such price for our Shares on and in consequence of the exercise of the option;

(gg) the date of the expiry of the option as may be determined by the Board; and

(hh) the method of acceptance of the option which shall, unless the Board otherwise determines, be as set out in paragraph (c) above.

(iii) other terms and conditions (including, without limitation, any minimum period for which an option must be held before it can be exercised and/or any performance targets which must be achieved before the option can be exercised) relating to the offer of the option which in the opinion of the Board are fair and reasonable but not being inconsistent with Share Option Scheme and the Listing Rules.

(f) Price of Shares

Subject to any adjustments made as described in paragraph (r) below, the subscription price of a Share in respect of any particular option granted under the Share Option Scheme shall be determined by the Board in its absolute discretion, but in any event must be at least the higher of:

(i) the official closing price of our Shares as stated in the Stock Exchange’s daily quotation sheets on the date on which such option is offered in writing to our Eligible Participant, which must be a day on which the Stock Exchange is open for the business of dealing in securities;

(ii) the average of the official closing prices of our Shares as stated in the Stock Exchange’s daily quotation sheets for the five business days immediately preceding the date on which such option is offered in writing to our Eligible Participant; and

(iii) the nominal value of a Share.

(g) Granting options to a director, chief executive or substantial shareholder of our Company or any of their respective associates

Any grant of options to a director, chief executive or substantial shareholder (as defined in the Listing Rules) of our Company or any of their respective associates (as defined in the Listing Rules) is required to be approved by the independent non-executive Directors (excluding any independent non-executive Director who is the grantee of the options). If the Board proposes to grant options to a substantial shareholder or any independent non-executive Director (or any of their respective associates (as defined in

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the Listing Rules)) which will result in the number of Shares issued and to be issued upon exercise of options granted and to be granted (including options exercised, canceled and outstanding) to such person in the 12-month period up to and including the date of such grant:

(i) representing in aggregate over 0.1% or such other percentage as may be from time to time provided under the Listing Rules of our Shares in issue on the date of offer of the option; and

(ii) having an aggregate value, based on the official closing price of our Shares as stated in the daily quotation sheets of the Stock Exchange on the date of each grant, in excess of HK$5 million or such other sum as may be from time to time provided under the Listing Rules, based on the official closing price of our Shares at the date of each grant, such further grant of options will be subject to the issue of a circular by our Company and the approval of our Shareholders in general meeting on a poll at which the grantee, his/her associates and all core connected persons (as defined in the Listing Rules) of our Company shall abstain from voting in favor, and/or such other requirements prescribed under the Listing Rules from time to time. Any vote taken at the meeting to approve the grant of such options shall be taken as a poll.

The circular to be issued by our Company to our Shareholders pursuant to the above paragraph shall contain the following information:

(i) the details of the number and terms (including the exercise price) of the options to be granted to each selected Eligible Participant which must be fixed before our Shareholders’ meeting and the date of Board meeting for proposing such further grant shall be taken as the date of grant for the purpose of calculating the exercise price of such options;

(ii) a recommendation from the independent non-executive Directors (excluding any independent non-executive Director who is the grantee of the options) to the independent Shareholders as to voting;

(iii) the information required under Rule 17.02(2)(c) and (d) and the disclaimer required under Rule 17.02(4) of the Listing Rules; and

(iv) the information required under Rule 2.17 of the Listing Rules.

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(h) Restrictions on the times of grant of option

A grant of options shall not be made after inside information has come to the knowledge of our Company until it has announced such inside information pursuant to the requirements of the Listing Rules and the Inside Information Provisions of Part XIVA of the SFO. In particular, no options shall be granted during the period commencing one month immediately preceding the earlier of:

(i) the date of the Board meeting (as such date to first notified to the Stock Exchange in accordance with the Listing Rules) for the approval of our Company’s annual results or our results for half-year, quarterly or other interim period (whether or not required under the Listing Rules); and

(ii) the deadline for our Company to publish an announcement of our annual results or our results for half-year, or quarterly or other interim period (whether or not required under the Listing Rules), and ending on the date of actual publication of the results for such year, half-year, quarterly or interim period (as the case may be), and where an option is granted to a Director:

(aa) no options shall be granted during the period of 60 days immediately preceding the publication date of the annual results or, if shorter, the period from the end of the relevant financial year up to the publication date of the results; and

(bb) during the period of 30 days immediately preceding the publication date of the quarterly results (if any) and half-year results or, if shorter, the period from the end of the relevant quarterly or half-year period up to the publication date of the results.

(i) Rights are personal to grantee

An option and an offer to grant an option shall be personal to the grantee and shall not be transferrable or assignable and no grantee shall in any way sell, transfer, charge, mortgage, encumber or create any interest (legal or beneficial) in favor of any third party over or in relation to any option held by him/her or any offer relating to the grant of an option made to him/her or attempt so to do (save that the grantee may nominate a nominee in whose name our Shares issued pursuant to the Share Option Scheme may be registered). Any breach of the foregoing shall entitle our Company to cancel any outstanding options or any part thereof granted to such grantee.

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(j) Time of exercise of Option and duration of the Share Option Scheme

An option may be exercised in accordance with the terms of the Share Option Scheme at any time after the date upon which the option is deemed to be granted and accepted and prior to the expiry of 10 years from that date. The period during which an option may be exercised will be determined by the Board in its absolute discretion, save that no option may be exercised more than 10 years after it has been granted. No option may be granted more than 10 years after the [REDACTED]. Subject to earlier termination by our Company in general meeting or by the Board, the Share Option Scheme shall be valid and effective for a period of 10 years from the [REDACTED].

(k) Performance target

A grantee may be required to achieve any performance targets as the Board may then specify in the grant before any options granted under the Share Option Scheme can be exercised.

(l) Rights on ceasing employment or death

If the grantee of an option ceases to be an employee of our Company or any of its subsidiaries:

(i) by any reason other than death or termination of his employment on the grounds specified in paragraph (m)below, the grantee may exercise the option up to the entitlement of the grantee as at the date of cessation (to the extent not already exercised) within a period of one month from such cessation; or

(ii) by reason of death, his/her personal representative(s) may exercise the option within a period of 12 months from such cessation, which date shall be the last actual working day with our Company or the relevant subsidiary whether salary is paid in lieu of notice or not, failing which it will lapse.

(m) Rights on dismissal

If the grantee of an option ceases to be an employee of our Company or any of its subsidiaries on the grounds that he/she has been guilty of serious misconduct, or has been convicted of any criminal offense involving his/her integrity or honesty or in relation to an employee of our Group (if so determined by the Board), or has become insolvent, bankrupt or has made arrangements or compositions with his/her creditors generally, or on any other ground on which an employee would be entitled to terminate his/her employment at common law or pursuant to any applicable laws or under the grantee’s service contract with our Group, his/her option will lapse and not be exercisable after the date of termination of his/her employment.

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(n) Rights on takeover

If a general offer is made to all our Shareholders (or all such Shareholders other than the offeror and/or any person controlled by the offeror and/or any person acting in concert with the offeror (as defined in the Takeovers Codes)) and such offer becomes or is declared unconditional during the option period of the relevant option, the grantee of an option shall be entitled to exercise the option in full (to the extent not already exercised) at any time within 14 days after the date on which the offer becomes or is declared unconditional.

(o) Rights on winding-up

In the event a notice is given by our Company to its members to convene a general meeting for the purposes of considering, and if thought fit, approving a resolution to voluntarily wind-up our Company, our Company shall forthwith give notice thereof to all grantees and thereupon, each grantee (or his/her legal personal representative(s)) shall be entitled to exercise all or any of his/her options (to the extent not already exercised) at any time not later than two business days prior to the proposed general meeting of our Company referred to above by giving notice in writing to our Company, accompanied by a remittance or payment for the full amount of the aggregate subscription price for our Shares in respect of which the notice is given, whereupon our Company shall as soon as possible and, in any event, no later than the business day immediately prior to the date of the proposed general meeting, allot the relevant Shares to the grantee credited as fully paid and register the grantee as holder thereof.

(p) Rights on compromise or arrangement between our Company and its members or creditors

If a compromise or arrangement between our Company and its members or creditors is proposed for the purposes of a scheme for the reconstruction of our Company or its amalgamation with any other companies pursuant to the laws of jurisdictions in which our Company was incorporated, our Company shall give notice to all the grantees of the options on the same day as it gives notice of the meeting to its members or creditors summoning the meeting to consider such a compromise or arrangement and any grantee may by notice in writing to our Company accompanied by a remittance or payment for the full amount of the aggregate subscription price for our Shares in respect of which the notice is given (such notice to be received by our Company not later than two business days prior to the proposed meeting), exercise the option to its full extent or to the extent specified in the notice and our Company shall as soon as possible and in any event no later than 12:00 noon (Hong Kong time) on the business day immediately prior to the date of the proposed meeting, allot and issue such number of Shares to the grantee which falls to be issued on such exercise of the option credited as fully paid and register the grantee as holder thereof.

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With effect from the date of such meeting, the rights of all grantees to exercise their respective options shall forthwith be suspended. Upon such compromise or arrangement becoming effective, all options shall, to the extent that they have not been exercised, lapse and determine. If for any reason such compromise or arrangement does not become effective and is terminated or lapses, the rights of grantees to exercise their respective options shall with effect from such termination be restored in full but only upon the extent not already exercised and shall become exercisable.

(q) Ranking of Shares

Our Shares to be allotted upon the exercise of an option will not carry voting, dividend or other rights until completion of the registration of the grantee (or any other person nominated by the grantee) as the holder thereof. Subject to the aforesaid, Shares allotted and issued on the exercise of options shall be subject to the provisions of the articles of association of the Company will carry the same rights in all respects and shall have the same voting, dividend, transfer and other rights, including those arising on liquidation as attached to the other fully-paid Shares in issue on the date of issue and rights in respect of any dividend or other distributions paid or made on or after the date of issue.

(r) Effect of alterations to capital

In the event of any alteration in the capital structure of our Company whilst any option may become or remains exercisable, whether by way of capitalization issue, rights issue, open offer (if there is a price dilutive element), consolidation, sub-division or reduction of share capital of our Company, or otherwise howsoever, such corresponding alterations (if any) shall be made in the number of Shares subject to any options so far as unexercised and/or the subscription price per Share of each outstanding option as the auditors of our Company or an independent financial advisor shall certify in writing to the Board to be in their/his/her opinion fair and reasonable in compliance with Rule 17.03(13) of the Listing Rules and the note thereto and the supplementary guidance issued by the Stock Exchange on 5 September 2005 and any future guidance and interpretation of the Listing Rules issued by the Stock Exchange from time to time and the note thereto. The capacity of the auditors of our Company or the approved independent financial advisor, as the case may be, in this paragraph is that of experts and not arbitrations and their certificate shall, in absence of manifest error, be final and conclusive and binding on our Company and the grantees.

Any such alterations will be made on the basis that a grantee shall have the same proportion of the issued share capital of our Company for which any grantee of an option is entitled to subscribe pursuant to the options held by him/her before such alteration and the aggregate subscription price payable on full exercise of any option is to remain as nearly as possible the same (and in any event not greater than) as it was before such event. No such alteration will be made the effect of which would be to enable a Share to be issued at less than its nominal value. The issue of securities as consideration in a transaction is not to be regarded as a circumstance requiring any such alterations.

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(s) Expiry of option

An option shall lapse automatically and not be exercisable (to the extent not already exercised) on the earliest of:

(i) the date of expiry of the option as may be determined by the Board;

(ii) the expiry of any of the periods referred to in paragraphs (l), (m), (n), (o) or (p);

(iii) the date on which the scheme of arrangement of our Company referred to in paragraph (p) becomes effective;

(iv) subject to paragraph (o), the date of commencement of the winding-up of our Company;

(v) the date on which the grantee ceases to be an Eligible Participant by reason of such grantee’s resignation from the employment of our Company or any of its subsidiaries or the termination of his/her employment or contract on any one or more of the grounds that he or he/she has been guilty of serious misconduct, or has been convicted of any criminal offense involving his/her integrity or honesty, or in relation to an employee of our Group (if so determined by the Board), or has been insolvent, bankrupt or has made compositions with his/her creditors generally or any other ground on which an employee would be entitled to terminate his/her employment at common law or pursuant to any applicable laws or under the grantee’s service contract with our Group. A resolution of the Board to the effect that the employment of a grantee has or has not been terminated on one or more of the grounds specified in this paragraph shall be conclusive; or

(vi) the date on which the Board shall exercise our Company’s right to cancel the option at any time after the grantee commits a breach of paragraph (i) above or the options are canceled in accordance with paragraph (u) below.

(t) Alteration of the Share Option Scheme

The Share Option Scheme may be altered in any respect by resolution of the Board except that:

(i) any alteration to the advantage of the grantees or the Eligible Participants (as the case may be) in respect of the matters contained in Rule 17.03 of the Listing Rules; or

(ii) any material alteration to the terms and conditions of the Share Option Scheme or any change to the terms of options granted,

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must be made with the prior approval of our Shareholders in general meeting provided that if the proposed alteration shall adversely affect any option granted or agreed to be granted prior to the date of alteration, such alteration shall be further subject to the grantees’ approval in accordance with the terms of the Share Option Scheme. The amended terms of the Share Option Scheme shall still comply with Chapter 17 of the Listing Rules and any change to the authority of the Board in relation to any alteration to the terms of the Share Option Scheme must be approved by Shareholders in general meeting.

(u) Cancelation of options

Any cancelation of options granted but not exercised must be approved by the grantees of the relevant options in writing. For the avoidance of doubt, such approval is not required in the event any option is canceled pursuant to paragraph (i).

(v) Termination of the Share Option Scheme

Our Company may by resolution in general meeting or the Board at any time terminate the Share Option Scheme and in such event no further option shall be offered but the provisions of the Share Option Scheme shall remain in force to the extent necessary to give effect to the exercise of any option granted prior thereto or otherwise as may be required in accordance with the provisions of the Share Option Scheme. Options granted prior to such termination but not yet exercised at the time of termination shall continue to be valid and exercisable in accordance with the Share Option Scheme.

(w) Administration of the Board

The Share Option Scheme shall be subject to the administration of the Board whose decision as to all matters arising in relation to the Share Option Scheme or its interpretation or effect (save as otherwise provided herein) shall be final and binding on all parties.

(x) Conditions of the Share Option Scheme

The Share Option Scheme shall take effect subject to and is conditional upon:

(i) the passing of the necessary resolution by our Shareholders to approve and adopt the rules of the Share Option Scheme;

(ii) the Listing Committee of the Stock Exchange granting the [REDACTED]of and permission to deal in, our Shares which may fall to be issued pursuant to the exercise of options to be granted under the Share Option Scheme;

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(iii) the obligations of the [REDACTED] under the [REDACTED] becoming unconditional (including, if relevant, as a result of the waivers of any such condition(s) by the [REDACTED] (on behalf of the [REDACTED]) and not being terminated in accordance with the terms of the [REDACTED]or otherwise;

(iv) the commencement of dealings in our Shares on the Stock Exchange.

If the conditions in paragraph (x) above are not satisfied within six calendar months from the adoption date:

(i) the Share Option Scheme shall forthwith determine;

(ii) any option granted or agreed to be granted pursuant to the Share Option Scheme and any offer of such a grant shall be of no effect; and

(iii) no person shall be entitled to any rights or benefits or be under any obligations under or in respect of the Share Option Scheme or any option granted thereunder.

(y) Disclosure in annual and interim reports

Our Company will disclose details of the Share Option Scheme in its annual and interim reports including the number of options, date of grant, exercise price, exercise period and vesting period during the financial year/period in the annual/interim reports in accordance with the Listing Rules in force from time to time.

(z) Present status of the Share Option Scheme

As of the Latest Practicable Date, no option had been granted or agreed to be granted under the Share Option Scheme.

Application has been made to the Listing Committee of the Stock Exchange for the [REDACTED] of and permission to deal in our Shares which may fall to be issued pursuant to the exercise of the options to be granted under the Share Option Scheme, being [REDACTED] Shares in total.

2. Tax and other indemnities

Our Controlling Shareholders [have entered] into the Deed of Indemnity with and in favor of our Company (for ourselves and as trustees for each of our subsidiaries) (being the contract referred to in paragraph (f) of “– B. Information about Our Business – 1. Summary of Material Contracts” above) to provide indemnities on a joint and several basis in respect of, among other matters, [taxation resulting from income, profits or gains earned, accrued or received] to which any member of our Group may be subject and payable, on or before the date when the [REDACTED] becomes unconditional.

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3. Litigation

As of the Latest Practicable Date, our Company was not aware of any other litigation or arbitration proceedings of material importance pending or threatened against it or any of our Directors that could have a material adverse effect on our financial condition or results of operations.

4. Joint Sponsors

The Joint Sponsors have made an application on behalf of our Company to the Listing Committee for the [REDACTED] of, and permission to deal in, the Shares in issue and to be issued as mentioned in this Document (including any Shares which may be issued pursuant to the exercise of the [REDACTED] or options which may be granted under the Share Option Scheme).

Each of the Joint Sponsors satisfies the independence criteria applicable to sponsors as set out in Rule 3A.07 of the Listing Rules.

The Joint Sponsors’ fees are US$0.6 million and are payable by our Company.

5. Preliminary expenses

The preliminary expenses relating to the incorporation of our Company are approximately US$5,480 and are payable by our Company.

6. Promoter

Our Company has no promoter for the purpose of the Listing Rules. Within the two years immediately preceding the date of this Document, no cash, securities or other benefit has been paid, allotted or given nor are any proposed to be paid, allotted or given to any promoters in connection with the [REDACTED] and the related transactions described in this Document.

7. Taxation of holders of Shares

(a) Hong Kong

The sale, purchase and transfer of Shares registered with our Company’s Hong Kong branch register of members will be subject to Hong Kong stamp duty, the current rate charged on each of the purchaser and seller is 0.1% of the consideration or, if higher, the fair value of the Shares being sold or transferred. Profits from dealings in the Shares arising in or derived from Hong Kong may also be subject to Hong Kong profits tax. Our Directors have been advised that no material liability or estate duty under the laws of China or Hong Kong would be likely to fall upon any member of our Group.

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(b) the Cayman Islands

Under the present Cayman Islands law, there is no stamp duty payable in the Cayman Islands on transfers of Shares given that our Company has no interest in land in the Cayman Islands.

Intending holders of the Shares are recommended to consult their professional advisors if they are in doubt as to the taxation implications of holding or disposing of or dealing in the Shares. It is emphasized that none of our Company, our Directors or the other parties involved in the [REDACTED] can accept responsibility for any tax effect on, or liabilities of, holders of Shares resulting from their subscription for, purchase, holding or disposal of or dealing in Shares or exercise of any rights attaching to them.

8. Qualification of Experts

The following are the qualifications of the experts who have given their opinion or advice which are contained in, or referred to in this Document:

Name Qualifications

ABCI Capital Limited Licensed under the SFO to conduct type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities as defined under the SFO

China International Capital Licensed to conduct type 1 (dealing in securities), Corporation Hong Kong type 2 (dealing in futures contracts), type 4 Securities Limited (advising on securities), type 5 (advising on futures contracts) and type 6 (advising on corporate finance) regulated activities under the SFO

PricewaterhouseCoopers Certified Public Accountants under Professional Accountants Ordinance (Chapter 50 of the Laws of Hong Kong) and Registered Public Interest Entity Auditor under Financial Reporting Council Ordinance (Chapter 588 of the Laws of Hong Kong)

Walkers (Hong Kong) Legal advisors to our Company as to Cayman Islands law

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Name Qualifications

Commerce & Finance Law PRC legal advisors Offices

China Index Academy Industry consultant

9. Consents of Experts

Each of the experts named in “– D. Other information – 8. Qualification of Experts” in this Appendix has given and has not withdrawn its respective written consent to the issue of this Document with the inclusion of its report and/or letter and/or opinion and/or the references to its name included herein in the form and context in which it is respectively included.

10. Interests of experts in our Company

None of the persons named in “– D. Other information – 8. Qualification of Experts” in this Appendix is interested beneficially or otherwise in any Shares or shares of any member of our Group or has any right or option (whether legally enforceable or not) to subscribe for or nominate persons to subscribe for any shares or securities in any member of our Group.

11. Binding Effect

This Document shall have the effect, if an application is made in pursuance hereof, of rendering all persons concerned bound by all of the provisions (other than the penal provisions) of sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions) Ordinance so far as applicable.

12. Miscellaneous

(a) Within the two years immediately preceding the date of this Document:

(i) save as disclosed in the section headed “History, Reorganization and Corporate Structure,” no share or loan capital of our Company or any of our subsidiaries has been issued or agreed to be issued or is proposed to be fully or partly paid either for cash or a consideration other than cash;

(ii) no share or loan capital of our Company or any of our subsidiaries is under option or is agreed conditionally or unconditionally to be put under option;

(iii) no commissions, discounts, brokerages or other special terms have been granted or agreed to be granted in connection with the issue or sale of any share or loan capital of our Company or any of our subsidiaries; and

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(iv) no commission has been paid or is payable for subscription, agreeing to subscribe, procuring subscription or agreeing to procure subscription of any share in our Company or any of our subsidiaries;

(b) there are no founder, management or deferred shares nor any debentures in our Company or any of our subsidiaries;

(c) our Directors confirm that there has been no material adverse change in the financial or trading position or prospects of our Group since December 31, 2020 (being the date which the latest audited combined financial information of our Group were made up);

(d) there has not been any interruption in the business of our Group which may have or has had a significant effect on the financial position of our Group in the 12 months preceding the date of this Document;

(e) the principal register of members of our Company will be maintained in the Cayman Islands by [REDACTED] and a branch register of members of our Company will be maintained in Hong Kong by [REDACTED]. Unless our Directors otherwise agree, all transfer and other documents of title of Shares must be lodged for registration with and registered by the Hong Kong Branch Share Registrar and may not be lodged in the Cayman Islands. All necessary arrangements have been made to enable the Shares to be admitted to CCASS;

(f) no company within our Group is presently [REDACTED] on any stock exchange or traded on any trading system;

(g) our Directors have been advised that under Cayman Islands law the use of a Chinese name by our Company in conjunction with the English name does not contravene Cayman Islands law;

(h) our Company has no outstanding convertible debt securities or debentures; and

(i) there is no restriction affecting the remittance of profits or repatriation of capital by our Company into Hong Kong from outside Hong Kong.

13. Bilingual Document

The English and Chinese language versions of this Document are being published separately, in reliance upon the exemption provided by section 4 of the Companies (Exemption from Companies and Prospectuses from Compliance Provisions) Notice (Chapter 32L of the Laws of Hong Kong). In case of any discrepancies between the English language version and Chinese language version of this Document, the English language version shall prevail.

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A. DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES

The documents attached to a copy of this Document and delivered to the Registrar of Companies in Hong Kong for registration were (a) a copy of each of the [REDACTED]; (b) the written consents referred to in “Statutory and General Information – D. Other Information – 9. Consents of experts” in Appendix IV to this Document; and (c) a copy of each of the material contracts referred to in “Statutory and General Information – B. Further Information about our Business – 1. Summary of material contracts” in Appendix IV to this Document.

B. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the offices of Sidley Austin at Level 39, Two International Finance Centre, 8 Finance Street, Central, Hong Kong during normal business hours from 9:30 a.m. to 5:30 p.m. up to and including the date which is 14 days from the date of this Document:

(a) the Memorandum of Association and the Articles of Association;

(b) the Accountant’s Report for the years ended December 31, 2018, 2019 and 2020 from PricewaterhouseCoopers, the text of which is respectively set out in Appendix I to this Document;

(c) the report from PricewaterhouseCoopers in respect of the unaudited pro forma financial information, the text of which is set out in Appendix II to this Document;

(d) the audited combined financial statements of our Group for the years ended December 31, 2018,2019 and 2020;

(e) the legal opinion dated the Document date issued by Commerce & Finance Law Offices, our legal advisors as to PRC law, in respect of certain aspects and general corporate matters and the property interest of our Group;

(f) the letter of advice dated the Document date issued by Walkers (Hong Kong), our legal advisors as to Cayman Islands law, summarizing certain aspects of the company law of the Cayman Islands referred to in Appendix III to this Document;

(g) the industry report issued by CIA;

(h) the Cayman Islands Companies Act;

(i) the material contracts referred to in “Statutory and General Information – B. Further Information about our Business – 1. Summary of material contracts” in Appendix IV to this Document;

–V-1– 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. APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES AND AVAILABLE FOR INSPECTION

(j) service agreements and letters of appointment entered into between our Company and each of the Directors “Statutory and General Information – C. Further Information about our Directors and Substantial Shareholders – 1. Directors” in Appendix IV to this Document;

(k) the written consents referred to in “Statutory and General Information – D. Other Information – 9. Consents of experts” in Appendix IV to this Document; and

(l) the rules of the Share Option Scheme.

–V-2–