Futu News, June 16, this Wednesday.$Yuexiu Service (06626.HK) $According to the announcement, the company intends to issue about 370 million shares from June 16 to 21, including a public offering of about 36.966 million shares and an international offering of about 333 million shares at an offering price of HK $4.88 to HK $6.52 per share.

It is reported that the company is a Chinese urban operation service provider and a major market participant in providing integrated property management services in the Greater Bay area. In November 2020, the company acquired the strategic investor Guangzhou Metro Environmental Engineering and Guangzhou Metro property Management, and became a compound property management company with "Metro Environmental Engineering maintenance + Metro property Management Operation".

As of December 31, 2020, the company's total managed area is 32.6 million square meters, and the number of properties under management is 215. of the total managed area, 96.1% are located in first-tier, new first-tier and second-tier cities. According to the statistics of the China Index Research Institute, in terms of overall strength, the company ranked 16th among the top 100 property service enterprises in 2021, and in terms of market share in terms of managed area in 2020, the company ranks seventh among the top 100 property services enterprises that provide commercial operation services.

In terms of financial position, the company's total operating income in 2018, 2019 and 2020 was 763 million yuan, 896 million yuan and 1.168 billion yuan respectively, with a compound growth rate of 23.7% in 2018-2020. The net profit recorded in the same period was 47.3 million yuan, 93.2 million yuan and 204 million yuan respectively, with a compound growth rate of 107.7 percent in 2018-2020.

In terms of industry, according to the statistics and forecasts of the Middle Index Research Institute, the area under management of commercial properties in China has increased from 1.4 billion square meters in 2015 to 2.3 billion square meters in 2020, with a compound annual growth rate of 10.44 percent from 2015 to 2020, and is expected to continue to increase to 3 billion square meters in 2025.

The market size of China's property management services has an average compound growth rate of 17.6% from 2015 to 2019. According to the first Taiping Weiss and Ehan think tanks, the total business income of the property management industry will grow at a compound annual rate of 19.7% from 2020 to 2024.

As regards cornerstone investors, the company has entered into cornerstone investment agreements with Xinhua Asset Management (Hong Kong) Limited, Kaiser Private Equity Fund SPC-SPI, Crotona Assets Limited, Shang Tang Technology (SensePower), Shenghui Holdings Limited, Keltic Investment (HK) Limited, Mr. Jiang Xiejun, Mr. Ko Jiansheng, Huake Capital Limited and Shanghui Enterprises Limited for the cornerstone placing.

Assuming that the over-allotment option is not exercised, the company intends to use the net proceeds from the global offering for the following purposes: about 60% will be used to finance strategic acquisitions and investments, and to further establish strategic alliances to expand the company's business scale. Enhance the company's regional influence and improve its business penetration in the residential property management service market, the public property management service market and the commercial property management and operation service market. About 15% will be used to further develop value-added services to diversify the portfolio of services provided by the company and enhance profitability; about 15% will be used to develop information technology systems and smart communities; about 10% will be used to supplement the company's working capital and general corporate purposes.