Poly Property Services : CHANGE OF USE OF PROCEEDS FROM THE GLOBAL OFFERING

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

POLY PROPERTY SERVICES CO., LTD.

保利物業服務股份有限公司

(A joint stock company incorporated in the People's Republic of China with limited liability)

(Stock Code: 06049)

CHANGE OF USE OF PROCEEDS FROM THE GLOBAL OFFERING

Reference is made to the prospectus of Poly Property Services Co., Ltd. (the "Company", together with its subsidiaries, the "Group") dated 9 December 2019 (the "Prospectus") in relation to the global offering (the "Global Offering") and the listing of the H Shares of the Company on the Main Board of The Stock Exchange of Hong Kong Limited. Unless otherwise stated, the terms used in this announcement have the same meanings as those defined in the Prospectus.

USE OF PROCEEDS DISCLOSED IN THE PROSPECTUS

As disclosed in the section headed "Future Plans and Use of Proceeds" in the Prospectus, the Company intends to use the net proceeds of the Global Offering for the following purposes:

• Approximately 57% will be used to pursue selective strategic investment and acquisition opportunities and to further develop strategic alliances and expand the scale of our property management business;
• Approximately 15% will be used to further develop our value-added services;
• Approximately 18% will be used to upgrade our systems for digitisation and smart management; and
• Approximately 10% will be used for working capital and general corporate purpose.

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Net proceeds from the Global Offering amounted to approximately HK$5,218.2 million after exercising the Over-Allotment Option in full and deducting the underwriting fees and relevant expenses. As of the date of this announcement, the Group has used approximately HK$99.8 million of the proceeds strictly in accordance with the use of proceeds from the Global Offering as set out in the Prospectus. The unutilised net proceeds amount to approximately HK$5,118.4 million. The use of proceeds from the Global Offering as at the date of this announcement is as follows:

			Net proceeds		Expected
Planned use of the	Original		actually	Net proceeds	timetable for
	utilised as of	unutilised as of	the usage of
net proceeds as stated	percentage of	Net proceeds	the date of this	the date of this	the unutilised
in the Prospectus	net proceeds	for planned use	announcement	announcement	net proceeds
	%	HK$ millions	HK$ millions	HK$ millions
To pursue selective strategic	57.0	2,974.4	88.7	2,885.7	On or before
investment and acquisition					31 December 2022
opportunities and to further
develop strategic alliances and
expand the scale of the Group's
property management business,
which includes:
(i) General acquisitions of	46.0	2,400.4	0.0	2,400.4	On or before
and investments in other					31 December 2022
property management
companies
(ii) Acquisition of and	11.0	574.0	88.7	485.3	On or before
investment in property					31 December 2022
management companies
with a focus on non-
residential properties
Including: acquisition of	7.4	386.1	88.7	297.4	On or before
and investment in property					31 December 2022
management companies
focusing on public and
other properties
To further develop the Group's	15.0	782.7	0.0	782.7	On or before
value-added services, which					31 December 2022
includes:
(i) Investment in companies	9.0	386.1	0.0	386.1	On or before
which provide community					31 December 2022
products and services
(ii) Upgrade of hardware and	6.0	257.4	0.0	257.4	On or before
develop smart community					31 December 2022
and operation services for
commercial facilities

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						Net proceeds				Expected
Planned use of the	Original					actually		Net proceeds	timetable for
				utilised as of	unutilised as of	the usage of
net proceeds as stated	percentage of		Net proceeds	the date of this	the date of this	the unutilised
in the Prospectus	net proceeds	for planned use	announcement	announcement	net proceeds
	%		HK$ millions		HK$ millions		HK$ millions
To upgrade the Group's systems	18.0	939.3	7.4	931.9	On or before
for digitisation and smart											31 December 2022
management, which includes:
(i) Upgrade of smart terminals	14.0	730.5	2.1	728.4	On or before
and Internet of Things											31 December 2022
platform
Including: establishment	2.8	146.1	2.1	144.0	On or before
of unified smart carpark											31 December 2022
system to realise integrated
management and enable
smart access with facial
recognition in addition to
the existing identification
via plate number
(ii) Other digital and smart	4.0	208.7	5.3	203.4	On or before
management related use											31 December 2022
Including: establishment	2.6	135.7		5.3	130.4	On or before
and development of											31 December 2022
internal information
sharing platform and
database to achieve
interconnection among the
main components of our
systems for digitisation
and smart management
to enhance management
efficiency
Working capital and	10.0	521.8		3.7	518.1	N/A
general corporate purpose
Total	100.0	5,218.2	99.8	5,118.4

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CHANGE OF USE OF PROCEEDS

The Board approved the change in the intended use and allocation of the net proceeds from the Global Offering. Details of the revised use of the net proceeds are set out below:

			Net proceeds	Revised net	Expected
	Revised	Net proceeds	actually	proceeds	timetable for
Revised use of	utilised as of	unutilised as of	the usage of
percentage of	for revised	the date of this	the date of this	the unutilised
the net proceeds	net proceeds	planned use	announcement	announcement	net proceeds
	%	HK$ millions	HK$ millions	HK$ millions
To pursue selective strategic	37.0	1,930.7	88.7	1,842.0	On or before
investment and acquisition					31 December 2022
opportunities and to further
develop strategic alliances and
expand the scale of the Group's
property management and
value-added services businesses,
which include acquiring or
investing in companies engaged
in businesses related to property
management or value-added
services, or forming joint
ventures with such companies,
and investing in related
industrial funds with business
collaborative partners
To further develop the Group's	35.0	1,826.4	0.0	1,826.4	On or before
value-added services, which					31 December 2022
include the development of
value-added products and
services related to daily
scenarios such as communities,
commercial offices and urban
management, as well as assets,
the upgrading of hardware
and the development of smart
community and commercial
facilities operation services, and
the development of value-added
services related to commercial
operations such as office
buildings

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						Net proceeds		Revised net	Expected
	Revised		Net proceeds		actually		proceeds	timetable for
Revised use of			utilised as of	unutilised as of	the usage of
percentage of		for revised	the date of this	the date of this	the unutilised
the net proceeds	net proceeds		planned use	announcement	announcement	net proceeds
	%		HK$ millions		HK$ millions		HK$ millions
To upgrade the Group's systems	18.0	939.3	7.4	931.9	On or before
of digitisation and smart											31 December 2022
management, which include
the purchase and upgrading of
hardware for building smart
terminals and Internet of Things
platforms, the construction
and development of internal
information sharing platforms
and databases, the recruitment
and development of professional
and technical staff and
information management teams,
and the commencement of R&D
for innovative applications
related to the Group's business
Working capital and	10.0	521.8	3.7	518.1	N/A
general corporate purpose
Total	100.0	5,218.2	99.8	5,118.4

REASONS FOR AND BENEFITS OF THE CHANGE IN USE OF PROCEEDS

Since its listing, the Company has, in the course of promoting the implementation of its "Comprehensive Property" strategy, continued to increase its market-oriented expansion to enhance and optimize its business scale, to further extend the boundaries, depth and breadth of its property management service offering and tap into the blue ocean of value-added services. The Group also actively keeps abreast of any potential market opportunities and trials and reasonably arranges innovative businesses so that the Company can develop value-added products and services related to daily scenarios such as communities, commercial offices and urban management, as well as assets.

Based on the above considerations and the following reasons, in order to enhance the efficiency of the use of the proceeds, to capture market opportunities for business development in a timely manner, to balance the use of proceeds in a more reasonable and scientific manner while aligning with the Company's business development needs, coupled with changes in external environmental factors, the Board proposed to adjust the original scope of use and allocation ratio of the proceeds from the Global Offering in the Prospectus as follows:

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1. Expanding the depth and breadth of value-added services
   In order to further deepen the substance of value-added services and improve the quality of existing value-added services, and to better create value for the shareholders, the Company proposed to cancel the original sub-category of "To further develop the value- added services" and to consolidate, expand and revise its scope as "To further develop value-added products and services related to daily scenarios such as communities, commercial offices and urban management, as well as assets, the upgrading of hardware and the development of smart community and commercial facilities operation services, and the development of value-added services related to commercial operations such as office buildings", and increase the proportion of proceeds to be used for the value- added services from 15% to 35%. The Company will still maintain its strategic stability and strictly comply with its principles such as industry prioritisation while leveraging its strength from its capital scale and branding as well as its service management capabilities to further enhance its management scale and service capability and readjust its deployment in the industry. The Company will also actively identify suitable projects in the value-added services sector, including opportunities for business development in the areas of office buildings and urban services, for the purpose of gradually strengthening the Company's market-oriented solicitation of business and operation management capabilities in those relevant businesses.
2. Capturing more favourable investment opportunities
   In respect of acquisition and investment opportunities, in view of the considerable time required to identify targets in the market that are in line with the Company's development strategies in terms of their business scope and scale, and for the purpose of better utilising its financial resources and capturing more favourable investment opportunities, the Company proposed to cancel the original sub-category of investment and acquisition, and to consolidate, expand and revise its scope as "To pursue selective strategic investment and acquisition opportunities and to further develop strategic alliances and expand the scale of the Group's property management and value-added services businesses, which include acquiring or investing in companies engaged in businesses related to property management or value-added services, or forming joint ventures with such companies, and investing in related industrial funds with business collaborative partners". The Company also proposed to reduce the proportion of proceeds for this purpose from 57% to 37%. The Company will continue to actively identify suitable investment and acquisition targets. If the Company is to enter into any agreement or arrangement on relevant investments or acquisitions, the Company will comply with the applicable requirements under the Listing Rules.

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3. Accelerating the upgrading of digital and smart management systems

In addition, in view of the rapid development and iterative update of information technology, the original sub-category of the use of proceeds has limited the practical operation. Therefore, in order to provide more flexibility in the use of proceeds, the Company proposed to cancel the original sub-category of "To upgrade the Group's systems for digitisation and smart management" and consolidate and revise it as "To upgrade the Group's systems of digitisation and smart management, which include the purchase and upgrading of hardware for building smart terminals and Internet of Things platforms, the construction and development of internal information sharing platforms and databases, the recruitment and development of professional and technical staff and information management teams, and the commencement of R&D for innovative applications related to the Group's business".

The Board considers that the change of use of net proceeds is fair and reasonable and will enable the Group to meet its needs of utilising proceeds in a more efficient and flexible manner. The Board is also of the opinion that there is no material change in the nature of the Group's business as set out in the Prospectus, and the proposed change of use of net proceeds shall not have any material adverse impact on the operations of the Group and is in the best interests of the Company and its shareholders as a whole.

By Order of the Board

POLY PROPERTY SERVICES CO., LTD.

Huang Hai

Chairman of the Board and Non-executive Director

Guangzhou, PRC, 1 April 2021

As at the date of this announcement, the non-executive Directors of the Company are Mr. Huang Hai, Mr. Liu Ping and Mr. Hu Zaixin; the executive Director of the Company is Ms. Wu Lanyu; and the independent non-executive Directors of the Company are Mr. Wang Xiaojun, Ms. Tan Yan and Mr. Wang Peng.

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