Chairman's message

I. Market Review for 2017 First Half

In the first half of 2017, the property market remained relatively stable in China. The policy focus of the Central Government also gradually shifted from "reduction of inventory" last year to "de-leveraging and repression of speculation." The government also clearly stated that it will accelerate the assessment on how to establish a fundamental mechanism and long-term effective system that suit the conditions of China and enforce market discipline. In general, it clearly aims to achieve healthy and stable development of the property industry, so the related market will mainly adhere to a course of stability maintenance.

During the period, the Group has managed to further expand its market share. Looking at the property market in China, strong rigid demands still existed and the property prices have been gradually stabilized in some cities. While the financial policies of China are undergoing rather radical changes, the ability of citizens to purchase homes has still been higher than expected. Hopefluent will adhere to its notion of "growing steadily" to build a sustainable ecosystem of its property business through actively creating strong synergies across different segments under a flexible layout.

II. Overall Business Review

During the period under review, the Group has kept abreast of the trend of economic development and segregation of the property industry. The Group has also pursued a market oriented direction with its competitive commercial model, which not only laid a solid foundation for business development, but also further enhanced the profitability and consolidated the leading presence of Hopefluent. While maintaining constant growth of the integrated property service business, the Group continued to evolve into an all-round, diverse company across different sectors. It has also integrated online-to-offline development to form innovative value-added property services that can complement each other, covering property financial and Internet financial services businesses, etc. These initiatives have vigorously boosted our business growth and facilitated the steady coordinated development of all operations.

As at 30 June 2017, the Group recorded a turnover amounted to HK$2,247.3 million, approximately 29% higher than the same period last year (2016: HK$1,741.5 million). Profit attributable to shareholders increased by approximately 31.6% to HK$121.6 million from the last corresponding period (2016: HK$92.4 million). Basic earnings per share were HK18.20 cents (2016: HK13.83 cents), and the board of Directors have resolved to declare an interim dividend of HK4.5 cents per share (2016: HK3 cents).

The primary and secondary property real estate agency service businesses of the Group registered a turnover of HK$1,383.7 million and HK$597.3 million respectively, accounting for 62% and 27% of the Group's total turnover. The turnover from the financial services business was HK$52.3 million, accounting for 2% of the Group total. The remaining 9% or HK$214.0 million was derived from property management business and other businesses. By geographical location, Guangzhou business accounted for about 51% of the Group's total turnover, while around 49% came from businesses outside Guangzhou. Total new home sales for the first half of 2017 amounted to approximately HK$170 billion, from handling around 150,000 new home sales transactions. Total gross floor area sold was about 14 million square meters.

1. Primary property real estate agency service business underwent stable growth and retained its leading position

The Group has strived to seize the opportunities in the market, aiming to enlarge its market share and reinforce its leading position by actively building a nationwide business presence. Currently, the Group's business network covers more than 150 cities in China and is the agent of more than 900 projects. Business performance in core cities such as Guangzhou, Shenzhen, Foshan, Dongguan and Hefei grew notably, which further consolidated its industry leadership advantages. The Group flexibly allocated its sales teams of primary and secondary property real estate agency businesses and strived to accelerate the business development in second- and third-tier cities such as Nanjing, Wuhan, Zhengzhou, Jinan, Guiyang, Nanning, Zhongshan and Zhuhai, and further capture the market share in those areas. As of 30 June 2017, turnover of the segment amounted to HK$1,383.7 million (2016: HK$1,069.4 million), an increase of approximately 29% from the last corresponding period.

2. Secondary property real estate agency service business continued to grow and agent team expanded continuously

The secondary property real estate agency service business performed satisfactorily during the period. Turnover increased by about 34% to about HK$597.3 million as compared with the corresponding period last year (2016: HK$444.9 million) from handling around 32,500 secondary property transactions (2016: 26,400). The brilliant business performance injected momentum for the steady growth of the Group in the future. In the past six months, although the property policies in China have become moderately more restricted, the Group has won the trust of customers and delivered outstanding results for this segment with its quality and reliable services and nationwide business coverage. The number of branches of the Group increased from around 400 at the end of 2016 to 430 during the review period, and the number of staff also grew from 7,200 to 7,600.

3. Financial services grew rapidly while assets management service was launched

The Internet financial service platform has been operating for nearly two years and has performed so well that it has become the Group's growth spotlight. The Group has continued to enhance its strong cooperation with various renowned and reputable financial institutions. It has also worked closely with partners from different sectors such as offline points-of-sale, secondary branches and community resources to build an extensive financial customer base. It has strived to meet the demand of consumers through optimizing the O2O sales model and increasing the value of the transaction chain. The Group's financial service products feature small amounts, diverse targets, short cycles and controllable risk, and these products have gained the widespread recognition from customers since their debut.

As at 30 June 2017, loans originated from financial services exceeded HK$1.5 billion and turnover was approximately HK$52.3 million (2016: HK$39.4 million). With a stronger business foundation, after careful evaluation, the Group has decided to develop the assets management business to meet the increasing demand in the market. Quality customers can help the Group to build a professional property database at the same time. Through precise data application, demand analysis and logic integration, it is believed that the "mega data" can be utilised in the assets management business, and then be extended to other business areas comprehensively and in-depth in the future, turning it into an indispensible competitive edge of the Group in the mega data era.

4. Internet business has enhanced branding effect as Group strives to integrate offline and online businesses

The Group has been more actively and widely applying Internet technology. With the increasing popularity of smartphones and electronic products, and to precisely reflect and fully implement its diverse business development strategy, the Group has formed an Internet technology R&D department with professionals. It has taken into consideration its business needs to continuously design and promote various Internet products, including computer and mobile apps such as iHouseKing (房王網) (, Fang Wang Jia (房王加), Fang Zhuan Jia (房專家), He Ji Mai Lou (合記買樓) and HFmoney (合富金融) ( It has also developed new applications suitable for the Group on the WeChat platform. All of these initiatives have enabled the Group to capture the opportunities from different businesses and markets, notably strengthen the impact of its branding, quickly and effectively integrate various online and offline operations, optimize workflow and further facilitate operational efficiency.

5. Property management services have achieved stable growth by providing value-added services for customers

The property management business performed well during the period under review, generating a steady profit contribution to the Group's total revenue. Good interaction with its customers has further enhanced the Group's brand. In the first half of 2017, this segment's turnover increased from approximately HK$188 million in the same period last year to approximately HK$214 million. The Group has provided property management services to about 300 residential, office and commercial properties in Guangzhou, Shanghai, Tianjin and Wuhan with a total gross floor area of approximately 30 million square meters.