碧桂園服務控股有限公司 碧桂園服務控股有限公司 Country Garden Services Holdings Company Limited Country Garden Services Holdings Company Limited (Incorporated in the Cayman Islands with limited liability) Stock Code: 6098 2019 ANNUAL R E P O R T ANNUAL REPORT Content 2 Corporate Overview 3 Corporate Information 4 Major Events 6 Awards and Honours 8 Chairman’s Statement 13 Financial Summary 14 Management Discussion and Analysis 30 Biographical Details of Directors and Senior Management 37 Corporate Governance Report 55 Report of the Directors 77 Independent Auditor’s Report 83 Consolidated Statement of Comprehensive Income 84 Consolidated Balance Sheet 86 Consolidated Statement of Changes in Equity 87 Consolidated Statement of Cash Flows 88 Notes to the Consolidated Financial Statements 151 Glossary CORPORATE OVERVIEW Country Garden Services Holdings Company Limited (stock code: 6098.HK) is a leading service provider in comprehensive property management in China with residential property as its major focus. We have won industry- leading customer satisfaction rate with our quality services and service brands as well as gained high recognition in the industry. The Group has the honor of ranking Top 3 in terms of overall evaluation and No. 1 in terms of operating performance among the Top 100 Property Management Companies in China of 2019, according to China Index Academy; No. 1 among Chinese Community Service Providers in 2019 according to YIHAN (億翰智庫) and was awarded “2019 Top 10 Listed Company of Property Management Service” by China Property Management Association. Founded in 1992, the Group experienced 28 years of steady development. It always adheres to the service concepts of “Cater for property owners’ urgent needs; address property owners’ concerns.” and “Property owner-oriented”. With strong business capability, it has formed a comprehensive and efficient property management service system. It is committed to offering property owners quality services through strong offline service system and consolidation of community business resources. Furthermore, it provided full life-cycle value services by focusing on preservation and appreciation of the value of owners’ real estates. Our main businesses include property management services, community value-added services, value-added services to non-property owners and “Three Supplies and Property Management” businesses (currently includes property management services and heat supply business), which form an integrated service offering to our customers and cover the entire value chain of property management. As at 31 December 2019, apart from the property management services of the “Three Supplies and Property Management” businesses, our contracted gross floor area (“GFA”) was approximately 684.7 million sq.m., and our revenue-bearing GFA was approximately 276.1 million sq.m.. In addition, both of the contracted and revenue-bearing GFA of the property management services of “Three Supplies and Property Management” businesses were approximately 84.9 million sq.m. as at 31 December 2019. We managed 2,405 property projects covering more than 350 cities across 31 provinces, municipalities and autonomous regions in China and overseas markets, providing quality property management services to more than 3.46 million property owners. Property management services — We provide a range of property management services to property owners, residents and property developers, including security, cleaning, greening, gardening and repair and maintenance services. We have been optimizing our property management portfolio and enriching our forms of management. Currently, our property management portfolio covers residential properties, commercial properties, office buildings, multi-purpose complexes, government, hospitals and other public facilities, industrial parks, highway service stations, parks, scenic areas and schools. In addition, we have expanded into the operation and maintenance of urban public facilities, intelligent industrial park operation services, thus extended our community life services to city integrated services. Community value-added services — By focusing on the mature development cycle of communities, the family growth cycle of property owners and the property value cycle, we are committed to becoming an “integrated whole-cycle community life services operator”, providing comprehensive community value-added services to property owners. In light of the daily needs of property owners, we proactively promoted this business segment in the old and new communities, and provided a wide range of community value-added services to property owners and residents of the properties under our management, which mainly included: (1) housekeeping services; (2) turn- key furnishing and move-in services; (3) community media services; (4) value-added innovations services; (5) real estate brokerage services; and (6) community area services. Value-added services to non-property owners — The value-added services to non-property owners provided by us mainly include (1) consultancy services to property developers for their pre-sale properties management, as well as consultancy services for properties managed by other property management companies, (2) cleaning, greening, repair and maintenance services to property developers at the pre-delivery stage, and (3) sales and leasing agency services of unsold parking spaces and properties. “Three Supplies and Property Management” businesses — In 2018, we have set up a joint venture company and started to enter the separation and transfer of property management and heat supply on “Three Supplies and Property Management” Reform. We promoted the smooth transition and takeover of property management and heat-supply businesses projects under the “Three Supplies and Property Management” Reform in an orderly manner. We will give full play to our successful experience in this benchmarking project and continue to further develop the “Three Supplies and Property Management” field, thus creating one of our future growth drivers. On 19 June 2018, the Company was listed on the Stock Exchange, indicating its formal entrance into the international capital market. Since then, the Company was well recognized in the market. It was included as a constituent of MSCI China Index and Hang Seng Composite LargeCap & MidCap Index, on 31 August 2018 and 10 September 2018, respectively, and became one of the investable stocks in the Mainland-Hong Kong Stock Connect. In addition, the Company received a rating of A in the MSCI ESG ratings assessment in November 2019. 2 Country Garden Services Holdings Company Limited CORPORATE INFORMATION BOARD OF DIRECTORS CAYMAN ISLANDS PRINCIPAL SHARE REGISTRAR Executive Directors AND TRANSFER OFFICE Mr. Li Changjiang (President) Conyers Trust Company (Cayman) Limited Mr. Xiao Hua Cricket Square, Hutchins Drive Mr. Guo Zhanjun P.O. Box 2681 Grand Cayman Non-executive Directors KY1-1111 Ms. Yang Huiyan (Chairman) Cayman Islands Mr. Yang Zhicheng Ms. Wu Bijun HONG KONG BRANCH SHARE REGISTRAR Tricor Investor Services Limited Independent Non-executive Directors Level 54, Hopewell Centre Mr. Mei Wenjue 183 Queen’s Road East, Hong Kong Mr. Rui Meng Mr. Chen Weiru AUDITORS PricewaterhouseCoopers AUDIT COMMITTEE Certified Public Accountants Mr. Rui Meng (Chairman) 22nd Floor, Prince’s Building, Central, Hong Kong Mr. Mei Wenjue Mr. Chen Weiru COMPLIANCE ADVISOR Somerley Capital Limited REMUNERATION COMMITTEE 20/F, China Building, 29 Queen’s Road Central, Hong Kong Mr. Chen Weiru (Chairman) Ms. Yang Huiyan LEGAL ADVISERS Mr. Mei Wenjue As to Hong Kong laws: Woo Kwan Lee & Lo NOMINATION COMMITTEE 26/F, Jardine House. 1 Connaught Place. Central, Hong Kong Ms. Yang Huiyan (Chairman) Mr. Rui Meng As to PRC laws: Mr. Chen Weiru DeHeng Law Offices (Shenzhen) 11/F, Section B, Anlian Plaza No. 4018 Jintian Road, JOINT COMPANY SECRETARIES Futian District Shenzhen, PRC Mr. Huang Peng Mr. Leung Chong Shun (Solicitor in Hong Kong) PRINCIPAL BANKERS (In Alphabetical Order) Agricultural Bank of China Limited AUTHORISED REPRESENTATIVES Bank of China Limited Mr. Li Changjiang China Construction Bank Corporation Mr. Huang Peng China Merchants Bank Co., Ltd. Industrial and Commercial Bank of China Limited REGISTERED OFFICE Cricket Square, Hutchins Drive COMPANY WEBSITE P.O. Box 2681 www.bgyfw.com Grand Cayman KY1-1111 STOCK CODE Cayman Islands 6098 PRINCIPAL PLACE OF BUSINESS IN HONG KONG LISTING DATE 4th Floor, Ruttonjee House 19 June 2018 Ruttonjee Centre 11 Duddell Street Central Hong Kong HEADQUARTERS AND PRINCIPAL PLACE OF BUSINESS IN THE PRC West Building of Country Garden Office Beijiao Town Shunde District, Foshan Guangdong Province, PRC Annual Report 2019 3 MAJOR EVENTS In May 2019, after obtaining approval from relevant authorities, the company name of Guangdong Country Garden Property Services Co., Ltd., a subsidiary of CG Services, was changed to Country Garden Intelligent Services Group Co. Ltd.*. MAY AUGUST JULY In July 2019, United Gain and CG Life Services (both wholly-owned subsidiaries of CG Services), entered into equity transfer agreements with certain third parties to acquire 100% equity interest in Asia Asset Real Estate Services (China) Co., Ltd. The acquisition will further expand the scale and coverage of the Group’s business and enhance the Group’s influence and competitiveness in the market. The acquisition was completed on 9 September, 2019. 4 Country Garden Services Holdings Company Limited MAJOR EVENTS In August 2019, Vipshop (China) Holdings Limited issued a notice