Aoyuan Healthy’s revenue and net profit increased by approximately 46% and 108% respectively in 2019

• Continue to pursue asset-light operations and focus
  on general health & wellness industry

• Steady development on the three core businesses

Financial Performance:

	Year ended 31 December
(RMB Million)	2019	2018	Change
Revenue	900.8	618.8	+45.6%
Gross profit	337.1	208.8	+61.4%
Gross profit margin	37.4%	33.7%	+3.7p.p.
Net profit	163.1	78.3	+108.3%
Profit attributable to owners of the Company	162.5	78.1	+108.1%
Basic earnings per share (RMB cents)	23.78	16.54	+43.8%
Final dividend per share (RMB cents)	9.0	5.5	+63.6%

Operational & Development Highlights:

Rapid growth in scale expansion in property management segment

• Revenue from property management service
  segment amounted to RMB646.4 million with a growth rate of 42.6%, accounting
  for approximately 71.8% of the total revenue. Gross profit margin was 34.6%.
• As at 31 December 2019, the Group had a total gross
  floor area (GFA) under management of approximately 15.1 million sq.m., of which
  the Group achieved an increase in the GFA under management of 4.7 million sq.m.
  under the property management service segment, representing a year-on-year (y-o-y)
  increase of 45.2%.
• Revenue from Southern China region accounted for 62.2% of the total
  revenue; the Group will continue to benefit from policy for Guangdong-Hong
  Kong-Macao Greater Bay Area.

Significant growth in commercial operational segment

• Segment Revenue from commercial operational
  services amounted to RMB254.4 million with an annual growth rate of 53.6%,
  accounting for approximately 28.2% of the total revenue. Gross profit margin
  was 44.5%.
• As of 31 December 2019, the Group was
  contracted to provide commercial operational services to 37 shopping malls,
  which together has a contracted GFA of approximately 1.8 million square metre (sq.m.).
  In which, contracts provided for post-opening commercial operation and
  management services to 28 shopping malls represented a contracted GFA of
  approximately 1.5 million sq.m..
• The Group achieved an increase in aggregate
  contracted GFA of 493,000 sq.m. under the commercial operational service
  segment, representing a y-o-y growth of 38.8%. During the Year, the Group had a
  total of 10 newly opened shopping malls.

Broad application of the general health and
wellness business in the two ecosystems of “lives in properties and commercial
complex”

• Healthcare business was officially launched as a strategic business.
  The Group set up a dedicated team composed of well-known healthcare experts in
  the industry and formulated the development strategy of healthcare business for
  the next three years. The Group also officially launched two community
  healthcare pilot projects in Guangzhou Panyu Jinye Villa Garden and Guangzhou
  Luogang Aoyuan Plaza.
• In respect of traditional Chinese medicine (TCM) business, the Group
  set up two TCM centres in Guangzhou Panyu Aoyuan Healthcare Plaza and Guangzhou
  Luogang Aoyuan, and has a team of well-known TCM practitioners.
• In respect of medical beauty, the Group introduced international
  medical team, modern medical system and service concepts for medical beauty
  business. The Group also established medical beauty brand MS ARORA and
  cosmetics brand ARORA LAB.

HONG
KONG, CHINA – Media OutReach – 25
March 2020 – Aoyuan Healthy Life Group Company Limited (“Aoyuan Healthy” or the “Group”; SEHK
stock code: 3662), is pleased to announce its annual results for the year ended
31 December 2019 (the “Year”).

 

For the year ended 31 December 2019, the Group’s total revenue was RMB900.8
million, representing an increase of 45.6% as compared to that in 2018. The
increase was mainly due to the rapid growth in GFA under management and
commercial operational services. Revenue generated from property management
services and commercial operational services contributed to 71.8% and 28.2% of
total revenue, respectively.

 

During the Year, the Group’s gross profit was approximately RMB337.1
million, representing an increase of approximately 61.4% as compared to that in
2018. The gross profit margin was 37.4% which remained higher than average. The
net profit was approximately RMB163.1 million in 2019, representing an increase
of approximately 108.3%. Return on equity was approximately 33.5%. Basic
earnings per share was RMB23.78 cents. The Board recommends the payment of
final dividend of 9.0 RMB cents per share for 2019.

 

Property Management Services

The Group provided property management services to
94 properties in 38 cities across 13 provinces, municipalities, and autonomous
regions in the PRC with a total GFA under management of approximately 15.1
million sq.m.. The Group achieved an increase in the GFA under management of
4.7 million sq.m. under the property management service segment, representing a
y-o-y growth of 45.2%.

 

The revenue generated from property management
services segment increased for about 42.6%, of which the increase in the
revenue generated from property management services was approximately 27.5%,
and the increase in revenue generated from sales assistance services was
approximately 74.8%.

 

Commercial Operational Services

The Group was contracted to provide commercial
operational services to 37 shopping malls with a contracted GFA of
approximately 1.8 million sq.m.. Among them, contracts provided for
post-opening commercial operation and management services to 28 shopping malls
represented a contracted GFA of approximately 1.5 million sq.m.. During the
Year, the Group achieved an increase in aggregate contracted GFA of 493,000
sq.m. under commercial operational service segment, representing a y-o-y growth
of 38.8%.

 

As of 31 December 2019, the Group provided
commercial operational services to 17 shopping malls in operation in 11 cities
in the PRC, with a total GFA under management of approximately 775,000 sq.m..
During the Year, the Group had a total of 10 newly opened shopping malls.

 

The increase of revenue generated from commercial
operational services segment was approximately 53.6%, mainly due to the
increase in revenue generated from commercial operation and management services
of approximately 56.9% and the increase in revenue generated from market
positioning and business tenant sourcing services of approximately 48.4%.

 

General Health and Wellness Business

In respect of healthcare business, as a strategic
business officially launched at the end of the Year, the Group set up a dedicated team composed of
well-known healthcare experts in the industry and formulated the development strategy of healthcare
business for the next three years which proposed the “1+3” model and “1+1+N”
healthcare system strategy, namely: to generate synergy with elder care at
home, at institution,
and during sojourn with community elder care
as the foundation. At the end of the Year, the Group also officially launched
two community healthcare pilot projects in Guangzhou Panyu Jinye Villa Garden
and Guangzhou Luogang Aoyuan Plaza, fully explore the quality resources of the
cultural tourism industry under China Aoyuan Group Limited (“China
Aoyuan“, SEHK stock code: 3883”) , so as to open up a new life of living,
healthcare and vacation experience for the elderly.

 

In respect of TCM business, the Group set up two
TCM centres in Guangzhou Panyu Aoyuan Healthcare Plaza and Guangzhou Luogang
Aoyuan Plaza under its management. The Group had a team of well-known TCM practitioners,
providing professional, convenient and distinctive TCM services and sincerely
serving the community and surrounding population.

 

In respect of medical beauty, the Group introduced
international medical team, modern medical system and service concepts. With
rich experience of our established management team, the Group created a “light
medical beauty” concept of “professional medical beauty is all around you” for
medical beauty business, and established the medical beauty brand MS ARORA and
cosmetics brand ARORA LAB. The Group set up three medical beauty clinics during
the Year, which provide skincare treatments, micro cosmetics, and plastic
surgeries services, and formed a medical system with Chinese and Korean
features by integrating Korean medical elements and domestic medical beauty
market features, to provide better medical beauty services for domestic
consumers. Meanwhile, the Group jointly developed five new cosmetics products
with the well-known Korean cosmetics research and development company “Cosmax
Group” during the Year.

 

Outlook

In mid-late January 2020, COVID-2019 broke out
in the PRC. The Group responded quickly to this nationwide battle, and
established the “Coronavirus Emergency Management Office” for guiding epidemic
prevention. Always putting the lives and health of the owners, merchants,
customers, and employees as the top priority, the Group actively and
comprehensively took all-round measures from resource supply, disinfection and
protection, publicity, to closed management. Communities is the main battle
field and property management is the main force for epidemic prevention and
control. The Group implemented joint prevention and control measures, built a
tight line of defense for group prevention and controlled, strictly controlled
community entry and exit, and executed access control and epidemic prevention.
Besides, the Group provided owners with two types of personalised value-added
service models: “Yue Service” and “Healthy Life Service”, and launched group
purchase service of scarce protective materials such as alcohol and organic agricultural
by-products to ease owners’ worries.

 

As a listed company, the Group also takes up
corporate social responsibility. In addition to cooperating with China Aoyuan
Group in the donation of protective materials, the Group also overcomes
difficulties together with tenants through various preferential policies such
as rent reduction and exemption. Meanwhile, the Group has jointly launched a
free online consultation service for COVID-2019 with chunyuyisheng.com. During
the epidemic, the two personalised value-added service models provided by
property management have been effectively examined and affirmed by the owners.
In the future, the Group will continue to implement and improve the models. As
the epidemic still prevails, the Group will continue to adhere to the
“customer-oriented service” principle and mobilise various resources for
prevention. In a complex and volatile market with diverse and competitive
situation, the Group has always followed a sound financial management strategy,
maintained low-cost and multi-channel financing advantages, as well as
reasonable and safe debt levels.

 

Property Management

In respect of property
management, the continued trend of urban development and consumption upgrade
will support the long-term steady growth of the property management industry in
2020. In light of increasing competition in the industry, the Group provides
property management services for most of the property projects developed by
China Aoyuan Group, while achieving stable income contribution, expansion is
the only way for property management to increase market competitiveness. The
Group will leverage on the edge of the listing platform to deepen its strategic
layout and focus on the coordinated development with other businesses and will
also further expand the scale of property management through its own expansion,
investment, mergers and acquisitions, and joint investment and cooperation.
Besides, multiple business formats will be operated to complete strategy of the
entire industry chain of the property management industry. Through asset
management, it is developing a commercial and office property market with great
potential. The Group will further strengthen its property diversification
operations.

 

Commercial Operation

With the consumption
upgrade and rapid expansion of the consumer service industry, consumers are having higher expectation
on shopping experience and service quality, thus the demand for professional business
operation services is increasing. The Group provides commercial operation
services for two major brands of China Aoyuan Group, i.e. “Aoyuan Plaza” and “Aoyuan
City Plaza”, and also extended the service to third parties. The Group’s
extensive experience in the property management industry, helps provide quality
commercial operation and management services after the project operation
starts, and generates synergy of multiple businesses. The Group’s past
contracted projects will be successively launched in Guangdong-Hong Kong-Macao
Greater Bay Area, Anhui, Jiangxi, and other
areas. In response to the business development, changes in the market as well
as the impact brought by the epidemic, the Group will focus on enhancing its
operation quality, and the shopping malls under operation, and continuously
improve its operation capability to increase the revenue on projects. The Group
will also expand quality projects in a prudent manner. Leveraging on the
advantages in the general health and wellness business and industrial
integration, the Group has explored a new asset-light business model. The Group
provides asset-light services (medical beauty as well as healthcare services
and products) to the industrial zone owned by its service targets through the
ways of business and management consultation and business development and
operation service, and property management service.

 

General Health and Wellness Business

As customers’ needs are constantly evolving,
the Group will continue to provide general health and wellness service to meet
customers’ needs and enhance their experience, thereby achieving future growth.
As such, the Group will continue to expand the TCM healthcare business and
medical beauty business to cater to eldercare policies, build online platform
for community healthcare management and improve community service quality and
customer satisfaction. In addition, the Group is actively exploring strategic
alliance, investment, and acquisition opportunities, which can provide services
complementary to the property management and commercial operational services of
the Group.

 

Project in Fengxian District, Shanghai

Aoyuan Healthy actively extended its services
to the healthcare and medical beauty industries to enhance the service capacity
and quality. It is expected that the Group’s existing businesses will be
upgraded and integrated, providing a comprehensive healthcare services platform
for customers. In December 2019, the Group won a bid for a land plot in
Fengxian District, Shanghai. The Group will continue to pursue its asset-light
business model while jointly developing the project with China Aoyuan and
extending the scope of its services to the medical beauty industry. Fengxian
District is located in the industrial zone in Shanghai, dubbed as the “Oriental
Beauty Valley”. The industrial zone targets to stimulate the development of
healthcare and beauty industry, gathering many well-known medical beauty and
healthcare enterprises, attracting talents in the industry and encourage the
integration of industry resources.

 

The Group will conduct cooperation with China
Aoyuan on the project. China Aoyuan shall be responsible for the overall
development, construction, operation and management of the project and will be
entitled to 70% of the economic benefit arising from the project. Meanwhile,
Aoyuan Healthy can continue to pursue its asset-light business model and be
entitled to 30% of the economic benefit arising from the project, broadening
Aoyuan Healthy’s income source.

Mr. Guo Zining, Chairman of the Board and Non- Executive Director said, “In the future, adhering to the core values of “efficiency,
integrity, responsibility, and win-win”, we will not only pay close attention
to the perspective and rules of the capital market with an open mind, but also
polish the increasingly clear multi-dimensional business structure with the
brand concept of “creating the joy of life” while striking a balance between
vision and practice. The Group will continue to consolidate its position in the
property management service and commercial operation service industries, and
expand cooperation with quality independent third parties, actively adjust and
enrich its management portfolio, to enhance competitiveness, and leverage on
the unique general health and wellness industry model to build an all-round
industry chain strategy with property management and commercial operational
service, and seize market opportunities to reach a higher level. Meanwhile,
leveraging on the innovative development model of “health + technology, health
+ ecosystem”, the Group will actively develop the general health and wellness
industry, explore new business opportunities in the industries of community
elderly care and health management. The Group will continue to expand its
business scope and strive to become a leading healthy life service group in the
PRC.”

About Aoyuan Healthy Life Group Company Limited

Aoyuan Healthy Life Group
Company Limited is a reputable property management service and commercial
property operation service provider in the PRC offering diverse property
management services for residential and non-residential properties and a full
range of commercial property operation services for shopping malls, with a
focus on mid-range and high-end properties and mixed-use properties. The Group
is also actively expanding its value-added services to enhance customer
satisfaction.