KWG Living Announces Proposed Listing on the Main Board of the HKSE

October 19, 2020 - 02:47
KWG Living Announces Proposed Listing on the Main Board of the HKSE

Offer Price at Between HK$7.0 to HK$8.13 per Share to Raise Gross Proceeds up to HK$3.117 billion and to Introduce a Number of Solid Cornerstone Investors


HONG KONG,CHINA - Media OutReach - 19 October 2020 - KWG Living Group Holdings Limited ("KWG Living" orthe Company", together with its subsidiaries, the "Group", HKSE stock code: 3913), a comprehensive property management service provider in Chinatoday announces the details of the global offering(the "Global Offering") and the proposed listing of its shares (the "Shares")on the Main Board of The Stock Exchange of Hong Kong Limited (the "HKSE").

The Global Offering is of atotal of 383,384,000 Shares (the "Offer Shares"), comprising an internationalplacing of 345,044,000 Shares, including 70,623,355 Reserved Shares under thePreferential Offering (Could be reallocated and Depends on whether theover-allotment option is exercised or not) (the International Placing) and aHong Kong public offering of 38,340,000 Shares (Could be reallocated) (the"Hong Kong Public Offering"), representing approximately 90% and 10% of thetotal number of the Offer Shares respectively. The indicative offer price (the"Offer Price") range is HK$7.0 to HK$8.13 per Share.

ABCI Capital Limited andHuatai Financial Holdings (Hong Kong) Limited are the Joint Sponsors of Global Offering.ABCI Capital Limited, Huatai Financial Holdings (Hong Kong) Limited, ChinaInternational Capital Corporation Hong Kong Securities Limited, Credit Suisse(Hong Kong) Limited and Morgan Stanley Asia Limited are the Joint GlobalCoordinators of Global Offering. ABCI Capital Limited, Huatai FinancialHoldings (Hong Kong) Limited, China International Capital Corporation Hong KongSecurities Limited, Credit Suisse (Hong Kong) Limited, Morgan Stanley AsiaLimited (in relation to the Hong Kong Public Offering only), Morgan Stanley& Co. International plc (in relation to the International Offering only),BOCI Asia Limited, CGS-CIMB Securities (Hong Kong) Limited, CLSA Limited, CRICSecurities Company Limited, HeungKong Securities Limited are the JointBookrunners of Global Offering. ABCI Securities Limited, Huatai FinancialHoldings (Hong Kong) Limited, China International Capital Corporation Hong KongSecurities Limited, Credit Suisse (Hong Kong) Limited, Morgan Stanley AsiaLimited (in relation to the Hong Kong Public Offering only), Morgan Stanley& Co. International plc (in relation to the International Offering only),BOCI Asia Limited, CGS-CIMB Securities (Hong Kong) Limited, CLSA Limited, CRICSecurities Company Limited and HeungKong Securities Limited are the Joint LeadManagers of Global Offering.

The Group introduced a numberof solid cornerstone investors ("Cornerstone Investor"), to subscribe for acertain number of Offer Shares with an aggregate amount of US$120 million. Thecornerstone investors agreed that their shares purchased pursuant to theirrespective cornerstone investors agreement, are subject to the six monthsLock-up period following the Listing Date. The cornerstone investors include GaolingFund, L.P and YHG Investment, L.P.("Hillhouse Funds"), Orchid China Master FundLimited and LMA SPC, Harvest Global Capital Investments Limited, Snow Lake ChinaMaster Fund, Ltd., The Valliance Fund , China Lesso Group Holdings Limited, Oscarand Partners Capital Limited, and Aspex Master Fund, of which Hillhouse Fundssubscribed for approximately US$50 million, and other cornerstone investorseach subscribed for US$10 million.

The net proceeds of the GlobalOffering, after deducting the underwriting commissions and other estimatedexpenses in connection with the Global Offering, are estimated to beapproximately HK$2,755.5 million, assuming an Offer Price of HK$7.56 per OfferShare, being the midpoint of the proposed Offer Price range, and assuming theOver-allotment Option is not exercised. These proceeds are intended to beapplied as follows:

  • approximately 60% will be used to pursue strategicacquisitions and investment opportunities to further develop strategicalliances, expand business scale and increase market shares in residentialproperty management service market and commercial and other non-residential propertymanagement and operational service market;
  • approximately 25% will be used to upgrade theintelligent service systems in order to further enhance operational efficiencyand service quality;
  • approximately 10% will be used to further diversifyvalue-added services;
  • approximately 5% will be used for general businesspurpose and working capital.

KWG Living Group HoldingsLimited is a comprehensive property management service provider in China, carryingthe company philosophy of ''Careful Housekeeper''. KWG Living provide comprehensiveproperty management services for both residential properties and commercialproperties. Residential property management service segment comprises (i)pre-sale management services; (ii) property management services; and (iii)community value-added services, including (a) property agency services toproperty developers and property owners; (b) home-living services to propertyowners and residents; and (c) common area value-added services. The commercialproperty management and operational service segment comprises (i)pre-sale managementservices; (ii) commercial property management services; (iii) commercialoperational services; and (iv) other value-added services, primarily includingcommon area value-added services.

KWG Living focus on the developmentin the Greater Bay Area and the track record had grown rapidly. According toCIA, the Group was ranked 18th and 17th among the Top 100 Property ManagementCompanies in China (中國物業服務百強企業) in terms of overall strength in 2019 and 2020respectively. As of April 30, 2020, the total GFA under management ofresidential properties and commercial properties managed by the Group was 18.9million sq.m. and 3.3 million sq.m respectively. These residential properties werelocated in 38 cities or autonomous country in China, including major citiessuch as Beijing, Shanghai, Chengdu and Suzhou. KWG Living has furtherpenetrated the Great Bay Area. According to the industry consultant of theCompany, Jones Lang LaSalle Corporate Appraisal and AdvisoryLimited ("JLL"), among the property management companies with commercialoperational services, we were ranked seventh in China and fifth in the GreaterBay Area in terms of total GFA under management. In the Greater Bay Area, as ofApril 30, 2020, the group has a contracted construction area of 14.2 million sq.m,accounting for 41.2% of the total contracted construction area. The Group'srevenue increased from RMB 463 million in 2017 to RMB 1.125 billion in 2019, acompound annual growth rate of 55.8%, and net profit increased from RMB 44.15million in 2017 to RMB 185 million in 2019 , The compound annual growth rate is104.8%.

KWG Living has won well-recognized reputation and premium brought for its highquality service. The Group has won different awards, including the top 10leading companies in terms of service quality among the 2020 Top 100 PropertyManagement Companies in China(2020中國物業服務百強服務質量領先企業十強) by CIA, together with KWG Group, were awarded 2020 Top 100 CommercialProperty Companies in China (2020中國商業地產百強企業) (ranked No. 8) in 2020 by CIA and a 2019 high growth commercial property enterprise (2019年度高成長商業地產企業) by (聯商網) etc.The Group believes that well-recognized market reputation will enhance thecustomer stickiness, also help to secure high-profile property managementprojects and enable to further grow business. In addition, customers aregenerally willing to pay a premium for quality services. According to theranking of CIA, in 2019, among the top 10 leading property management companiesin the Greater Bay Area, the group was ranked first in terms of revenue persq.m. among the top 10 leading property management companies in the Greater BayArea.

KWG Living commercial propertymanagement and operation business is advancing steadily. Meanwhile, the Group couldalso provide diversified services to cater to the needs of different customers.The Group have been provided commercial property management and operationalservices since 2006. The commercial property management and operationalbusiness targets mid- to high-end commercial properties, including officebuildings and shopping malls. According to JLL, given the different customerbase, management and operation of commercial properties typically yield higherservice fees and profit margin in general, as compared to residentialproperties. Therefore, the Group has placed an emphasis on commercial propertymanagement and operational business, with an expectation that it will enhancefinancial performance and contribute to profitability of the Group. In addition to providing diversified property management services toresidential and commercial properties, the Group also provides a series ofvalue-added services, including second-hand property agency services forresidential properties, household cleaning, maintenance, remodeled apartmentdesign for elderly residents, and commercial property renovation, facilitymaintenance and leasing advertising space. The Group's business portfolio hascreated a diversified source of income, which helps improve financialperformance and increase customer loyalty.

The good development of KWGLiving is benefited from the support of KWG group and the excellent experiencedmanagement. KWG Living was spun-off from KWG Group. KWG Group is a large-scaleproperty developer which has further penetrated the Greater Bay Area andYangtze River Delta Area with a strong focus on first-tier, new first-tier andsecond-tier cities. The land reserves of KWG Group and its continuousexpansion will bring about steady support to the Group's business. Theextensive experience and strong management capabilities are key to the successof the Group. KWG Group not only has capable workforce, the Group also providethe employees with comprehensive trainings and established a talent poolmanagement system to cultivate the employees.

Moreover, the Group utilizedadvanced technology to improve operational efficiency and customer experience. TheGroup has been utilizing  "CoKWG" app toprovide residents with services including entry control, repair and maintenancerequirements. The Group has also installed various facilities in residentialproperties under management for developing a smart community, which can savelabor cost while enhancing customer experience.


The Chairman, Non-executiveDirector and a Controlling Shareholder MR. Kong Jianmin said, "KWG Living has already built a strongfoothold in the Greater Bay Area and will consolidate its leading positionthere. Having set its sights on building up its nationwide business presence,the Group will also seek to expand both its business and market shares inYangtze River Delta, Midwest China and, Hainan and Bohai Economic Rim. KWGLiving and KWG Group will also complement each other for mutual benefits basedon their good and stable relationship. After it is spun off through a separatelisting, KWG Living will have an independent platform for raising financingdirectly. The move will also be conducive to the expansion of its investor baseand the improvement of the efficiency of its business operation and financialmanagement."


Executive Director, the ChiefExecutive officer and a Controlling Shareholder MR. Kong Jiannan said, "Residential propertydevelopment as an industry has been growing on the back of China's urbanizationin the past several decades. This has generated a huge demand for residentialproperty management. Specifically, the Greater Bay Area's market forresidential property management is booming. As a comprehensive propertymanagement service provider in China, KWG Living will continue to grow andfurther diversify into value-added services through acquisitions and strategicinvestments. It will also upgrade its intelligent systems to further enhanceboth the operational efficiency and customer experience. In the future, KWGLiving expects its revenue to continue to grow on the back of the increasinggross floor area of properties under its management, its expanding geographicalmarket coverage and its further diversified service portfolio."


The Hong Kong Public Offering commenced at 9:00am on Monday, 19th October 2020, and is expected to close at 12:00 noon on Thursday, 22nd October2020. The results of allocation in the Hong Kong Public Offering and thePreferential Offering and the final Offer Price are expected to be announced onThursday, 29th October 2020. Dealings in the Shares on the MainBoard of HKSE are expected to commence on Friday, 30th October 2020,with 3913 as the stock code.


White Application Forms andprospectuses can be obtained from ABCI Securities Limited, Huatai FinancialHoldings (Hong Kong) Limited, China International Capital Corporation Hong KongSecurities Limited, Credit Suisse (Hong Kong) Limited, Morgan Stanley AsiaLimited, BOCI Asia Limited, CGS-CIMB Securities (Hong Kong) Limited, CLSALimited, CRIC Securities Company Limited, HeungKong Securities Limited, and anyof the designated branches of the receiving banks, including Hang Seng BankLimited, Industrial and Commercial Bank of China (Asia) Limited, and StandardChartered Bank (Hong Kong) Limited; or apply online via the White Form eIPOservice at Applicants can also instructHKSCC to process their applications by using Yellow Application Forms or viaelectronic instructions.

(From left to right) KWG Living Group Holdings Limited Investor Relations Director Yu Jing, Chief Financial Officer Li Mingming, Executive Director and General Manager of the financial management center Yang Jingbo, Executive Director and Chief Executive Officer Kong Jiannan, Executive Director and General Manager of the residential property management department Wang Yue, human resources General Manager Kuang Xiaoling, General Manager of commercial department Cuiran

KWG Living Group Holdings Limited

Offer Statistics at-a-Glance




Global Offering





Offer structure


- Hong Kong Public Offering

- International Placing








(Subject to reallocation)

(including 70,623,355

Reserved Shares under the Preferential


(Could be reallocated and Depends on whether the over-allotment option is exercised or not)




Proposed Offer Price


HK$7.00 to HK$8.13 per Share






Based on the
minimum Offer Price of HK$7.00 per Share

Based on the
maximum Offer Price of   HK$8.13 per Share





Market capitalization (assuming the over-allotment option is not exercised)


HK$14,124.7 million

HK$16,404.8 million









Announcement of results of allocations


Thursday, 29th October 2020




Expected listing date


Friday, 30th October 2020




Stock code






No. of shares per board lot







The following is a summary of the Company's trading records:



Year ended 31 December

Four months ended 30 April








(RMB in thousands)







Gross profit






Profit before tax






Profit for the year/period