Colour Life: Consolidate Basic Services, Optimize Financial Structure, Add Values and Empower Through Community Scenarios

Colour Life: Consolidate Basic Services,

Optimize Financial Structure,

Add Values and Empower Through Community Scenarios

Financial and operational highlights for the first half of 2020 (Unless otherwise specified, all amounts below are RMB)

* Steady growth in performance; Significant drop in Finance costs (1H 2020 Compared to 1H 2019)

Profit attributable to the owners of the company: RMB 236.4million (+9.5%)

Total debt: RMB2,252.2 million(-14.7%)

Finance costs : RMB 88.0 million (-20.1%)

Liability-to-asset ratio: 55.9% (-7.1 percentage points)

* Service skills honed with professionalism; Platform technology sees wide application (1H 2020 Compared to 1H 2019)

Ecosystem registered users:37,700 thousand (+17.8%)

Ecosystem active users: 16,688 thousand  (+1.7%)

(19 August 2020, Hong Kong) Colour Life Services Group Co., Limited ("Colour Life" or the "Company", stock code: 1778.HK; together with its subsidiaries, collectively referred to as the "Group") is pleased to announce that the Group's audited results for the six months ended 30 June, 2020 (the "Period"). (Unless otherwise specified, all amounts below are stated in RMB)

The unexpected outbreak of the pandemic at the beginning of this year posed a test of epidemic prevention and control to the property management industry. As crisis comes with opportunity, the pandemic also has shone the spotlight on the property management industry. This challenge enabled the society and the government to realize roles and importance of the property management, and at the same time marked the discovery of the secondary value of the industry. With exceptional service quality and expertise accumulated in the industry through years, Colour Life's constant efforts and remarkable achievements in fighting against the pandemic won the recognition of government and property owners.

In the joint fight against the pandemic, trust relationship between the property owners and the property management staffs was strengthened through enhanced communication, which is conducive to the development of value-added services. In the first half of 2020, we continued consolidating basic property managementsector and maintaining stable service scale. To seek for potential business opportunities and new revenue momentum, we also stick to exploring community scenarioswith JD.com and 360.com.

• Steady growth in performance; significant drop in Finance costs

For the first half of 2020, a total of RMB 1,778.9 million in revenue was recorded, and the profit attributable to the owners of the company was RMB 236.4 million, with year-on-year growth of 9.5%, showing a steady growth in performance.

The Company has been constantly optimizing its financial structure. As of 30 June, 2020, the total debt decreased by 14.7 % to RMB 2,252.2 million, and the liability-to-asset ratio decreased by 7.1 percentage points to 55.9%. Finance costs declined 20.1% to RMB 88.0 million.

• Focusing on improving services; platform technology sees wide application 

On the unique path to development with third-party expansion capability, Colour Life has been honing service skills with professionalism and concentration to forge core competence, winning market-share through reputation and cost-effectiveness to make steady progress in service scale.

As of 30 June, 2020, contracted GFAreached 563.7 million square meters, with service for 2,850 communities in 279 cities across the country. 

Based on the in-depth understanding of the property management industry, Colour Life strives to  upgrade itself via technology and achieves high-quality property management service. With the support of technology, the online platform has been launched in multiple application fields. For management business, the "Big Dipper" lowers labour costs and improves the overall management efficiency through order-based property management services. For services to property owners, the "Caizhiyun platform" integrates payment of property management fees, channels for notice and complaint on the online platform, which brings convenience to residents' daily lives and deepens connection between the property owners and the online platform.

With the promotion of more convenient channels such as WeChat applet, the number of users logging onto Caizhiyun through WeChat has soared up. As of 30 June, 2020, the number of registered users in Colour Life's ecosystem (including the Colour Cloud users both from APP and WeChat channels, as well as the users of the product companies of Colour Life's ecosystem) jumped by 17.8% to 37,700 thousand, among which, the number of active users increased by 1.7% to 16,688 thousand.

In addition, the Group consistently expands the application filed of its online platform technologies. For instance, the Group developed the "Changsha Gardener" (星城园丁) APP for the Public Security Bureau of Changsha to support the "Mass Prevention and Treatment" endeavor of the city. By 30 June, 2020, the number of registered users of the "Changsha Gardener" APP was around 6.0 million. Take service orders of patrol-controlling, since the launch of the APP on 28 March of 2019 till 30 June of 2020, 2.1 million person-times totally took part in patrol; the platform totally dealt with 566,000 reports of traffic violations and 1,400 reports of drug taking. These results indicate that our online platform technology has the prospects of wide application in multiple scenarios.    

In terms of overseas expansion, the Group has set up a joint venture named PMH-Colour Technology with Phu My Hung Development Corporation (PMH Corp) in Vietnam, managing the local property programs. The Vietnamese version of Caizhiyun APP has already been launched, which mainly provides users with basic functions such as property management and store information service. By 30 June, 2020, the total contracted GFA of PMH-Colour Technology's subsidiary reached 3.35 million square meters, and the number of online stores in the APP was as high as 1,386.

• Recognized efforts in pandemic prevention pave way for expansion of value-added services

In the pandemicprevention task at the beginning of this year, the Group responded quickly by making deployment and developing an action plan on pandemic prevention with unified standards. The action plan was implemented simultaneously in all the projects under our management across the country. The efforts paid off. The spread of mass pandemic was under control in communities we served. Moreover, the infection rate of the property owners of the communities in Wuhan under the Group's management was far below the city's average infection rate; Colour Life's efforts were recognized, with 75% of its projects being commended by the government or praised by the property owners.   

On 10 March, General Secretary Xi Jinping paid a special visit to Donghu Xincheng residential communities in Wuhan. The community is one of the 56 communities served by Colour Life in Wuhan and was awarded as"Pandemic-free Community" for its exceptional performance in pandemic prevention and control. 

During the pandemic, the bond between the property management staffs and the property owners deepened with mutual trust and affectionate communication. The increased contacts between the staffs of the property management units and the property owners also enabled the staffs to learn the various needs of the property owners, which can drive the development of value-added services in the future.  

• Jointly building smart community with JD.com and 360.com to expand value-added services

Our passion towards Internet technology, outstanding innovation capability and sensitivity to industry trends contributeour core competitiveness. Based on these virtues, JD.com and 360.com, two Internet giants, have cooperated with Colour Life as strategic investors to jointly explore community value-added business.  As transactions completed, the total shares held by JD.com (including its related parties) and 360.com (including its related parties) account for 5.00% and 3.05% of the Group's expanded shares respectively.   

The Group has developed a number of innovative business modes based on community scenarios, in an effort to explore a business pattern to promote sustainable development.Colour Life worked with JD.com in an attempt to provide diverse smart community services. In the midst of the pandemic, Colour Life launched the Intelligent Community Pandemic Control Platform with JD.com, offering multiple functions: checking real-time pandemic developments, online solution to needs in daily lives, and online medical consultations by experts. Theunmanned vehicles of JD.com also made presence in the residential communities under the management of Colour Life to satisfy contactless shopping needs, which relive pressure of the property management staffs and saved their time and energy.

In June 2020, Colour Life and JD.com jointly promote the implementation of a pilot business of smart parcel lockers. Under this business model, JD.com is responsible for installation of parcel lockers, while the Group coordinates parcel delivery and distribution within the community. The fees paid by couriers for using the lockers will be the revenue split between the Group and JD.com. Thisbusiness pattern of commission generation through efficient turnover of lockers will significantly drive up profitability compared to the fixed rental fees for the community space paid by other smart parcel locker operators. In the meantime, property management staffs of the Group assisted in order delivery, which offers additional opportunities for communication between staffs and the property owners. As at 7 August 2020, 115 smart parcel lockers have been set up at 95 pilot communities served by the Group in 17 cities.   

At the same time, based on the technology accumulation of 360.com in the core security area, the Group will cooperate with it in areas such as security, big data, the Internet of Things and artificial intelligence.

• Consolidate basic services with professionalism; explore community scenarios with experts  

As is remarked by Mr. PAN Jun, chairman of Colour Life Services Group Co., Limited: The Group has developed professionalservice quality andefficient reactions to challenges through years of dedication and accumulation in property management industry. Dedication, professionalism, and enhancement of basic services, ensure ingenuity and excellence and form an important foundation for future development of Colour Life. 

With solid grounds for basic business, the Group had also explored diverse innovative business models based on community scenarios in an effort to seek development paths that suit Colour Life. Passion for actively embracing the Internet, extraordinary innovation capability and sensitivity to the industrial trend,compose parts of our core competitiveness. Colour Life attracted the two Internet giants - JD.com and 360.com, which joined us as the strategic investors. Through collaboration with these powerful experts, we will explore community value-added services.

Looking ahead, Colour Life will make consistent efforts on "business growth", "efficiency enhancement" and "value appreciation". In terms of "business growth", community service industry in the second, third, and fourth-tier cities still remains at a highly fragmented stage. This represents a broad "blue ocean" and a promising development future for Colour Life, a company that excels at low-cost competition and independent third-party expansion. Colour Life will actively facilitate growth of service area through various measures. In terms of "efficiency enhancement", labour and operation costs will be lowered through streamlining head-office team, implementing flat organization structure and Internet technology-based delicacy management. A wide variety of community activities will be organized to promote community harmony and owners' satisfaction. In terms of "value appreciation", we will continuously pursue innovation and explore further potential in community value-added services by cooperating with partners such as JD.com and 360.com.

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About Colour Life Services Group Co., Limited

Headquartered in Shenzhen, Colour Life Services Group Co., Limited is a leading technology-based and comprehensive service operator of community platform in China. In recent years, with a business strategy of standardization, centralization and automation, Color Life has achieved rapid growth in service area by transforming itself into a platform-based enterprise, providing community services that balances cost and quality, so as to maintain its leading position in China's property management industry. In the meantime, Colour Life has always specialised in broadening the scope of the services of its online platforms to serve the diverse needs of the communities and establishing offline and online service platforms through internet, thus connecting efficiently the community residents with various commodity and service suppliers and providing customers with the best residential service experience. The move will help to build an ecosystem of community-based services and thus to maintain the momentum of the Group's development.

Website of Colour Life Services Group Co., Limited: http://gw.colourlife.com/