Revenue and Profit Increased over 40%

External expansionscale was better than expected

GFA underManagement Increased by 45.4%

[20 August 2021, Hong Kong] Yincheng Life Service CO., Ltd. (“YinchengLife Service” or “the Company”, together with its subsidiaries, “the Group”)(Stock code: 1922) announced its interim results for the six months ended 30June 2021 (the “Period”).

Results performance has risen steadilywith revenue and profit increasing over 40%

During the Period, the Group’s revenue increasedby approximately 41.0% period-on-period from approximately RMB416.9 million toapproximately RMB587.7 million. The revenue from the property managementservices reached RMB461.8 million, representing an increase of 37.3% period-on-periodand accounting for 78.6% of total revenue. The revenue from community value-addedservices increased by 56.3% period-on-period to RMB125.7 million, accountingfor 21.4% of total revenue.

As compared with thecorresponding period in 2020, Profit for the Period increased by 47.2% period-on-periodto RMB44.0 million and profits attributable to owners of the Company amountedto approximately RMB40.2 million,representing an increase of approximately 36.1% period-on-period. The netprofit margin was 7.5%, up 0.3 percentage points period-on-period. The grossprofit increased by 20.1% period-on-period to RMB97.8 million. Gross profitmargin was approximately 16.6%.

Adopted a two-pronged strategy,further expanded the market presence

Yincheng Life Service is stabilisingits inventory meanwhile actively expanding its contract volume, to ensure a stableand orderly development of its business. In terms of stabilising inventory, therenewal rate of the Group's existing customers has maintained a high level of92.9% for its quality services and good operational strength. The integratedcollection rate of residential properties’ customers reached 64.9% (theproportion of the amount paid to the property management fees receivable forthe year) during the Period. The Group is confident to maintain a collectionrate of more than 90% and a prepayment rate of about 40% throughout the year,as it enters the peak period of collection during 2H2021. For expandingcontract volume, the Group secured a net addition of 267 new residentialproperties projects during the Period through multiple channels, includingdirect engagement by customers, acquisition and winning public tenders.

Yincheng Life Service has beenadhering to the strategy of further developing the market in Yangtze RiverDelta Megalopolis and bringing the advantage of its centralised regionaldevelopment strategy into full play, and the Group has been expanding its businesscoverage with the strategy of “increasing the presence in Nanjing, expandingthe market in the southern part of the Jiangsu Province and exploring themarket in Huaihai district”. As of 30 June 2021, the Group’s contracted GFA andGFA under management were approximately 50.9 million sq.m. and approximately 49.0million sq.m., representing a period-on-period increase of 36.5% and 45.4%respectively.The Group’sbusiness covered 19 cities in China and managed 636 properties, including 385residential properties and 251 non-residential properties, serving over 450,000householdswhich covers over 1.4million customers.

External expansion scale was better than expected and further enhanced the proportionof third-party

Leveraging its advantages inbusiness model, quality services and reputation, as well as strong marketexpansion capabilities, the Group further consolidated its position as aregional leader in the industry. During the Period, GFA under management of theGroup increased by approximately 10 million sq.m.. Among which, the proportion ofGFA under management secured from third-party property developers furtherincreased to a high level of 84.2% (1H2020: 81.8%). As an expert in the operationof Second-hand Projects, most of the Group’s new expansion projects havequickly converted from contracted projects to GFA under management a few monthsafter engaged from property owners’ associations, and starts to contributerevenue within the year.

It is worth mentioning that YinchengLife Service has stepped up its efforts in expanding its business in regionsother than Nanjing since last year, and has achieved remarkable results.Currently, the Group’s GFA under management in regions other than Nanjing hasexceeded 18 million sq.m., representing a significant period-on-period increaseof 75.6%, and has further increased its proportion to the total GFA undermanagement to 37.4% (1H2020:31.0%),showing that the Group was able to replicate its success in Nanjing to otherregions.

Intensive cultivation of competitiveproducts in non-residential properties, achieving good results in subdivisions

Non-residential projects withhigher gross profit margin have become the focus segment of the Group in recentyears. As at 30 June 2021, non-residential GFA under management of the Groupamounted to 10.6 million sq.m., representing a period-on-period increase of 52.1%to 251 projects, and the total annualized contract value amounted toapproximately RMB470.0 million. During the Period, the contribution from non-residential properties recordeda revenue of approximately RMB218.8 million, almost reached 5:5 in comparisonto the revenue contribution from residential properties, with a moreoutstanding growth rate of 41.3%

The Group's non-residentialprojects cover 11 types of properties, and has intensively cultivated leadingproducts such as hospitals, financial institutions, government facilities, andlandmark buildings to build benchmark projects, striving to become an expert inthese subdivisions and gain a considerable market share in the high-qualitynon-residential market. The Group successfully acquired Huiren HengAn lastyear, which secured new engagements from five hospital institutions during the Period,hence further consolidated the Group’s leading position in hospital property managementmarket. The Group has also won the property management projects for various landmarks,such as the Nanjing City Wall and Jinling Museum, which will help to enhance theGroup’s reputation and brand image. In February this year, the Group alsoestablished a joint venture company to tap into the property management marketof large shopping malls and commercial streets, the Group expects to accumulateexperience from these projects which can help acquire more customers of similartype in the future and expand source of revenue.

Diversified community value-added serviceshave great growth potential

In terms of communityvalue-added services, the main purpose of which is to maintain customersatisfaction, so the Group is determined to provide value-added services onlywhere there is a strong demand, of which successful examples include fitnesstraining, pick-up lockers, electric vehicle charging, home renovation, groupcatering and other services. During the first half of 2021, Yincheng LifeService launched live-in elderly care services in response to the favourable“property + elderly care” policy and the needs of property owners, and hasbecome a pilot entity in Nanjing. At the same time, benefiting from thepresence of its projects in Nanjing, the Group’s electric scooter battery swapservices launched at the end of 2020 developed rapidly during the first half ofthe year. At present, the Group has built more than 270 smart battery swappingstations in Nanjing, with more than 2,700 registered active riders, which theGroup believe this business can start generating considerable profit after oneto two years of implementation period.

In recent years, as the socialvalue and contribution of the property management industry have been highlyrecognised by the whole society, the property management industry is in agolden period of rapid growth and development, with its prospects being highly recognised.The Group is highly recognised in society for its significant growth inmanagement scale, industry-leading service quality, excellent customerreputation and business development, and was ranked 18th among the top 100property service enterprises in China in 2021, and topped the 2020 NanjingProperty Credit List.

XIE Chenguang, Chairman ofYincheng Life Service CO., Ltd., said: “Looking ahead to the secondhalf of the year, we will strive to achieve the annual performance target inaccordance with the established strategy. In terms of business development, theGroup will continue to focus on market expansion and identify high-qualitymerger and acquisition targets that can bring along real synergies forexpanding our business scale; we will strive to acquire more projects outsideNanjing and quickly develop economy of scale and brand impact in the localareas; incorporate more residential projects into our community value-addedservices to enhance the residents’ well-being, while different types of ‘Industry +’ services are sought to beoffered to customers of non-residential projects in order to provide protectionfor non-residential customers, allowing them to realise greater business value.We believe that, by adhering to the concept of ‘reputation comes first,operation is the key’, establishing presence in Yangtze River Delta Megalopolisto give full play to the strategic advantages of regional centralisation, andadopting the multi-pronged management approach, the Group will be able to seizethe favourable policy and market opportunities. As such, the Group can expandits scale, maintain long-term sustainable development, improve profitabilityand deliver greater returns to the shareholders of the Company.”

(From left to right: ExecutiveDirector, Deputy Director and CFO, Huang Xuemei, Chairman and Non-executiveDirector, Xie Chenguang, Executive Director and President, Li Chunling, Directorof the Center of Capital Market, Xu Zan,)

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About Yincheng Life Service CO., Ltd.

Yincheng Life Service CO., Ltd is an established propertymanagement service provider in China, with over 20 years’ industry experiencefor the provision of diversified property management services and communityvalue-added services. Through the high-quality property management servicesprovided by the Company, Yincheng Life Service successfully translated into oneof the leading property management service providers in Nanjing and JiangsuProvince, the PRC from a local property management service provider in Nanjing.The Company ranked the 18th among the top 100 property service enterprises inChina (中國物業百強企業) in 2021.

The business scope of Yincheng Life Service covers a widespectrum of properties, including residential properties and non-residentialproperties covering government facilities, financial institutions, propertysales offices, hospitals, commercial complex, parks, highway service area,industrial parks, mixed-use properties, schools and office buildings. As at 30June 2021, the Group provided property management services in 19 cities of theYangtze River Delta, which has approximately 50.9 million sq.m. contracted GFAand GFA under management were approximately 49.0 million sq.m., and more than 636properties under managed.