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CONTENTS 02 Corporate Information 04 Honours and Awards 05 Chairman Statement 10 Management Discussion and Analysis 31 Directors and Senior Management 37 Corporate Governance Report 54 Report of the Directors 79 Independent Auditor’s Report 84 Consolidated Statement of Profit or Loss and Other Comprehensive Income 85 Consolidated Statement of Financial Position 87 Consolidated Statement of Changes in Equity 88 Consolidated Statement of Cash Flows 90 Notes to the Financial Statements 160 Financial Summary Xinyuan Property Management Service (Cayman) Ltd. CORPORATE INFORMATION EXECUTIVE DIRECTORS AUDITOR Ms. WANG Yanbo (Chief Executive Officer) Ernst & Young Mr. HUANG Bo 22/F, CITIC Tower 1 Tim Mei Avenue NON-EXECUTIVE DIRECTORS Central, Hong Kong Mr. ZHANG Yong (Chairman of the Board) Ms. YANG Yuyan REGISTERED OFFICE IN THE CAYMAN ISLANDS INDEPENDENT NON-EXECUTIVE PO Box 309, Ugland House DIRECTORS Grand Cayman, KY1-1104 Mr. LUO Ji Cayman Islands Mr. LI Yifan Mr. WANG Peng PRINCIPAL PLACE OF BUSINESS IN HONG KONG AUDIT COMMITTEE 9/F, Wah Yuen Building Mr. LI Yifan (Chairman) 149 Queen’s Road Central Mr. LUO JI Central, Hong Kong Mr. WANG Peng CORPORATE HEADQUARTER REMUNERATION COMMITTEE 3/F., International Living Clubhouse Mr. LI Yifan (Chairman) 18 Xiuyuan Road Mr. ZHANG Yong Jinshui District Mr. LUO Ji Zhengzhou City Henan Province, PRC NOMINATION COMMITTEE Mr. ZHANG Yong (Chairman) COMPLIANCE ADVISER Mr. LI Yifan Orient Capital (Hong Kong) Limited Mr. LUO Ji Rooms 2803–2807, 28/F Wing On House JOINT COMPANY SECRETARIES 71 Des Voeux Road Central Mr. XU Yibin Central, Hong Kong Mr. TSO Ping Cheong Brian FCPA, FCCA, FCIS, FCS CAYMAN ISLANDS SHARE REGISTRAR AUTHORIZED REPRESENTATIVES AND TRANSFER OFFICE Mr. ZHANG Yong Tricor Services (Cayman Islands) Limited Mr. TSO Ping Cheong Brian FCPA, FCCA, FCIS, FCS Second Floor, Century Yard Cricket Square, P.O. Box 902 Grand Cayman, KY1-1103 Cayman Islands 02 2019 Annual Report CORPORATE INFORMATION HONG KONG BRANCH SHARE OVERSEAS BANKER REGISTRAR Industrial and Commercial Bank of China Tricor Investor Services Limited (Asia) Limited (Queens Road Central Branch) Level 54, Hopewell Centre Basement, G/F and 1/F 183 Queen’s Road East Nos. 122–126 Queen’s Road Hong Kong Central, Hong Kong PRINCIPAL BANKERS LEGAL ADVISERS China Everbright Bank As to Hong Kong law: (Zhengzhou Dongfeng Branch) Li & Partners 58 Jingsan Road, Jinshui District 22/F., World Wide House Zhengzhou City Central Henan Province, PRC Hong Kong Bank of China STOCK CODE (Zhengzhou Mianfang East Road Branch) 1895 1/F., Xinyuan International City Garden 66 Mianfang East Road, Erqi District COMPANY WEBSITE ADDRESS Zhengzhou City www.xypm.hk Henan Province, PRC China Everbright Bank (Zhengbian Road Zhengzhou Branch) Zheng Bian Road & Ying Xie Road Junction Zhengzhou City Henan Province, PRC Bank of Zhengzhou (Zhengzhou Weier Road Branch) 8-3 Weier Road, Jinshui District Zhengzhou City Henan Province, PRC Huaxia Bank (Zhengzhou Branch) 29 Shangwu Waihuan Road, Zhengzhou City Henan Province, PRC Huaxia Bank (Zhengzhou Nongye Road Branch) Nongye Road and Dongming Road Intersection Zhengzhou City Henan Province, PRC 03 Xinyuan Property Management Service (Cayman) Ltd. HONOURS AND AWARDS 04 2019 Annual Report CHAIRMAN STATEMENT Dear Shareholders, On behalf of the board (the “Board”) of directors (the “Directors”) of Xinyuan Property Management Service (Cayman) Ltd. (“Xinyuan Service” or the “Company”), I am pleased to present the audited consolidated annual results of the Company and its subsidiaries (collectively, the “Group”) for the year ended 31 December 2019 (the “Year”). The Company’s shares were successfully listed on the Main Board of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) on 11 October 2019. Entering the capital market enhances the Group’s brand influence and provides new impetus for the Group’s future development. The Group’s management will adhere to a vision of innovative development in enhancing the Company’s operation and management efficiency, and meeting our customers’ increasingly sophisticated service demands, and continue to bring satisfying returns to the shareholders of the Company (the “Shareholders”). RESULTS REVIEW During the Year, the Group recorded operating revenue of RMB534.0 million, representing an increase of approximately 35.8% as compared to RMB393.3 million in 2018. The Group’s adjusted net profit (excluding deferred tax expenses arising from listing expenses, share-based payments and final dividends declared) was approximately RMB119.1 million, an increase of approximately 56.5% over approximately RMB76.1 million in 2018. As of 31 December 2019, the Group’s property management services had contracted GFA of approximately 37.03 million sq.m., representing an increase of 40.3% as compared to the end of 2018. GFA under management was approximately 20.06 million sq.m, representing an increase of 27.8% as compared to 15.7 million sq.m. at the end of 2018. There were 120 projects managed, covering 27 cities in China and serving over 200,000 owners with quality property management services. Over the years, the Group has consistently been ranked among the Top 100 Property Management Companies of China and was ranked 14th under comprehensive ranking therein. Our brand has leveled up itself from an industry brand to a social brand, from a regional brand to a national brand, and from a traditional service brand to an innovative technological brand. The Group maintains a mutually complementary business cooperation relationship with the Company’s controlling shareholder, Xinyuan Real Estate Co., Ltd. and its subsidiaries (excluding the Group, collectively “Xinyuan Real Estate Group”). We provide a wide range of services to Xinyuan Real Estate Group, including the provision of property management services, value-added services and pre-delivery and consultation services to residential properties, integrated properties, and industrial parks developed by Xinyuan Real Estate Group. As at 31 December 2019, we managed 65 properties of approximately 12.7 million sq.m. which were developed by Xinyuan Real Estate Group, representing approximately 63.5% of our total GFA under management as at that date. Meanwhile, Xinyuan Real Estate Group is committed to property-related technological innovation, with its technology subsidiary being one of the first domestic players in blockchain technology with world ranking in leading proprietary blockchain technology several times, providing us with technological support in aspects such as blockchain, artificial intelligence, and informatisation when we are carrying out property informatisation and building our community platform. 05 Xinyuan Property Management Service (Cayman) Ltd. CHAIRMAN STATEMENT While we benefit from the robust development of real estate development business of Xinyuan Real Estate Group, we also actively expand towards the independent third parties market. In 2019, the Group had 36 new contracted projects with contracted GFA of approximately 10.7 million sq. m. As at 31 December 2019, our contracted GFA with independent third parties was approximately 18.2 million sq.m., representing approximately 49%. In 2019, the Group’s expansion of the third-party market consisted mainly of low- cost, high-quality comprehensive engagements, marking a breakthrough from single-focus expansion to multifocal expansion that we further cultivate our regional presence upon the five regional expansion centres of Central China, the Bohai Rim, the Yangtze River Delta, the Pearl River Delta, and Southwest China. Meanwhile, the Group continued to increase cooperation with external parties for its high-end services. In 2019, we had a total of 11 contracts for sales venue assistance services and a total of 34 sales assistance cases under management, of which independent third party sales venue services accounted for 58%. SMART COMMUNITY The Group remains committed to construction of informatisation and smart features. We completed the overall planning and implementation of “Smart Community 1.0, 2.0, 3.0”, where a comprehensive upgrade was carried out for all smart hardware in neighborhoods under our management. Based on a facial recognition system that we have established, and assisted by video technology and deep-learning technology, we have achieved unified authentication and management of community informatisation and identity verification, connecting seamlessly to the community and extending throughout the community landscapes. The information technology system which we use consists of our business support system, management support system, strategy support system and customer service system, and provides us with a comprehensive infomrmation technology plagform for our daily operations as well as strong support in enhancing our management efficiency and business performance. Such information technology system represents in-depth application of informatisation in the aspects of on-site work efficiency improvement, management and operation efficiency improvement, strategic decision efficiency improvement and community service efficiency improvement, and in 2019 we increased the annual per capita management area by 19.5% year-on-year. BUILDING A DIVERSIFIED PROPERTY-RELATED MANAGEMENT ECO-CHAIN The Group has strengthened its presence both upstream and downstream as well as in peripheral services of the industry chain to cater to the community and living needs of owners and occupants. At the end of 2019, our joint venture Henan Qingning Apartment Management