Enrollment Scale and Business Network continues to expand Leading Position in Regional Industry is consolidated

HONG KONG SAR – Media OutReach – 26 Mar 2021 – JH Educational Technology INC. (“JH Education” or the “Company“, together with its subsidiaries, the “Group“, stock code: 1935.HK) is pleased to announce its audited annual results for the year ended 31 December, 2020 (the “Year“).

During the Year, the revenue of the Group increased by 16% to RMB561.3 million, the gross profit rose by 30% to RMB334.3 million, and the profit for the Year increased 43% to RMB325.6 million. Due to the increase in the number of new student enrollment and student enrollment, profit attributable to owners of the Company recorded a significant increase of approximately 51% to RMB265.9 million as compared to the same period last year. And the Group recorded a core net profit of approximately RMB331.8 million during the Year. The Board of Directors recommended a final dividend of HK5.00 cents and a special final dividend of HK6.25 cents per ordinary share for the Year.

Enrollment Scale Continues to Expand and the Leading Position in Regional Industry is Continuously Consolidated

Benefited from the widely-recognized educational quality and smooth progress of the campus expansion plan of the Group during the Year, new student enrollments of schools operated by the Group experienced a significant growth. New enrollment of Zhejiang Changzheng Vocational & Technology College (“Changzheng College”) in Zhejiang Province in 2020/2021 school year was 13,542 students, an increase of 18% year-on-year, which was ranked No. 1 among student enrollment programs of private junior colleges in Zhejiang province. The new enrollment of Zhengzhou College of Economics and Business (“College of Economics and Business”) in Henan Province in the 2020/2021 school year increased 12% year-on-year to 24,147 students, which was top-ranking among all undergraduate enrollment programs of private undergraduate colleges in Henan province. Over the years, the Group is committed to providing high-quality private education to students, dedicating resources to designing comprehensive and diversified curriculums for equipping students with readily applicable and practical skills, and creating and regularly updating major offerings with labor market orientation. Therefore, the employment rates for graduates from Changzheng College and College of Economics and Business have been consistently higher than similar colleges in the respective provinces.

Innovative Teaching Methods and Stable Operation during the Pandemic

There was an outbreak of the Corona Virus Disease (COVID-19) across China in early 2020. The Group strictly accorded top priority to the personal safety and health of its teachers and students and comprehensively implemented the requirements under “level 1 response” to effectively prevent the spread of the pandemic into the campus. Closed-end management has been adopted for the campus and the time for students to return to school for the spring semester has been postponed. During the outbreak of the pandemic, the Group strengthened the tutoring for students and implemented the policy of suspension of classes but no suspension of learning. Teaching plans and management plans during this special period have been formulated scientifically by actively utilizing the “Internet+” model to launch remote educational and teaching activities or online learning programs. Benefited from the innovative teaching methods and reasonable measures adopted by the Group, the remote academic tutoring was launched in an orderly manner. All teaching goals have been completed on schedule and the Group’s operation was stable. Upon evaluation, the Group considered that the outbreak of COVID-19 has had no obvious negative impact on the operation and financial condition of the Group.

The Strategy of “Acquisition + Campus Expansion” accelerates the Business Expansion

To strengthen the position as the largest private provider of formal higher education in Zhejiang province, the Group actively promotes the dual cultivation of “Acquisition + Campus Expansion” in order to accelerate the expansion of the school network and meet the growing demand for school quotas.

On one hand, the Group actively seeks potential investment opportunities in the market and plans to acquire or invest in schools that offer higher education with relatively low utilization rates and/or have substantial growth potential in the PRC. The Group prefers to acquire qualified undergraduate colleges and/or junior colleges whose school sponsors have elected them to be for-profit private schools in central China, eastern China and southern China. At present, the acquisition plan is preparing and advancing steadily.

On the other hand, except for acquisitions, the Group plans to establish a new campus of College of Economics and Business in Kaifeng, Henan Province, that will primarily offer undergraduate courses. The estimated student capacity is approximately 15,000 students. Moreover, the Group plans to establish a new campus of Changzheng College with an aggregate expected enrollment of not less than 5,000 students. Given the continuous expansion of enrollment scale, the Group also actively promotes the expansion of the campus and extends the school network to provide guarantee for the expansion of enrollment. In 2020, the Group completed the expansion of the main campus of College of Economics and Business by constructing three additional student dormitories and two new teaching buildings with an aggregate gross floor area of 27,000 sq.m.. From the new school year beginning in September 2020, student capacity of College of Economics and Business has increased to 24,809 students. In 2020, the Group completed the expansion of the existing campus of Changzheng College and the student capacity of Changzheng College has increased to 13,900 students starting from 2020/2021 school year. The Group is planning to further expand the main campus of College of Economics and Business and Changzheng College to increase the student capacity.

Mr. Chen Yuguo, Chairman, Chief Executive Officer and Executive Director of JH Education said, “Education is a never-ending business. In 2020, in face of complex economic environment, people’s demand for education have never diminished. The growing demand for education promotes the development of quality education. In order to better meet the needs of talent training and labor market, the state has continuously introduced favorable policies to support the development of education. Over the years, JH Education has adhered to the educational philosophy of ‘people-oriented education, moral cultivation, serve the society and pursuit of excellence’, and is committed to providing high-quality private higher education. Looking forward, JH Education will continue to focus on providing high-quality private higher education, seize the market opportunities, actively achieve sustainable development, expand the business scale and school network, optimize the operation, and bring substantial returns to shareholders.”

About JH Educational Technology INC.

JH Educational Technology INC. (“JH Education”) is a leading private higher education institution in Zhejiang Province. In addition to providing higher education services, JH Education also provides secondary education services to high school students in Zhejiang Province. There are three subsidiary schools controlled and operated by JH Education, including Zhengzhou College of Economics and Business, Zhejiang Changzheng Vocational & Technology College and Yueqing Jingyi Secondary School, which provides students with high-quality education including undergraduate education, junior college education and high school education. With more than 20 years’ private school operating experience and teaching quality, the subsidiary schools operated by JH Education have received many awards and commendations from the people’s governments at all levels and relevant education bureaus, including the “Outstanding Private School” awarded by the Zhejiang Provincial People’s Government to Zhejiang Changzheng Vocational & Technology College , and the “Outstanding Private School” awarded by the Henan Provincial Department of Education to Zhengzhou College of Economics and Business.

Focus on High-Quality Growth Core Profit up by 18.9%

Deep Penetration of First- and Second-Tier Regions

Focus on Enhancing Management Efficiency

Maintain Financial Soundness

Substantial Decline of Average Cost of Borrowings

Financial Highlights:

HONG KONG SAR – Media OutReach – 26 March 2021 – Zhenro Properties Group Limited (“Zhenro Properties” or “the Group”; stock code: 6158), a leading PRC property developer, announced its audited annual results for the year ended 31 December 2020 (the “Year”). Besides, the Company is pleased to announce that Mr. Liu Weiliang has been appointed as vice chairman of the Board and Mr. Li Yang has been appointed as an executive director and executive vice president of the Company. Mr. Liu and Mr. Li have abundant experience in the real estate industry. Both of them are talents cultivated by Zhenro Properties and have held various key positions successively in the Group, and the Company believes their appointments will further enable the Group to achieve a “high-quality growth”.

Results

During the Year, the Group achieved a solid growth in results. Its revenue increased by 11.0% year-on-year to RMB36.13 billion. Profit for the Year was RMB3.56 billion, representing a year-on-year increase of 15.0%. Net profit margin was 9.9%. The core profit¹ was RMB3.30 billion, representing a year-on-year increase of 18.9%. Core profit margin was 9.1%. The Board recommends the payment of a final dividend of HKD0.15 per share.

Innovative Targeted Marketing in Response to the COVID-19 Pandemic

In the first half of 2020, in response to the impact brought by COVID-19 pandemic, the Group established a “Pofeng Action (破風行動)” team which was responsible for the smooth resumption of construction projects, punctual supply of units and minimization of risks associated with unit delivery, and attained project resumption rate of 100% within 45 days of the shutdowns. In addition, through integrating big data resources and unifying online traffic platform across the country, the Group quickly carried out online-to-offline marketing, including the launch of an online sales app of “Zhenro Home (正榮置家)” and JD Zhenro flagship store to provide a new experience of virtual reality online tour of residential units. The Group also launched a series of innovative and targeted online live streaming marketing activities to draw more attention and sales in the market. During 2020, the Group recorded aggregated contracted sales of RMB141.9 billion, successfully achieving contracted sales target for the Year.

Deep Penetration of First- and Second-Tier Regions with Equal Emphasis on Quality and Equity Interests of Investment

The Group pursues the strategy of “regional penetration” by expanding its market share in the metropolis and their surrounding areas, laying a foundation for the future continuously high-quality development. During 2020, the Group acquired 46 parcels of land with total estimated GFA of approximately 7.14 million sq.m. in 21 cities. Of the Group’s newly acquired land bank, 43% and 31% is located respectively in the Yangtze River Delta region and the Western Taiwan Straits region, which are two core areas where the Group has considerable advantages. In terms of the tiers of cities, 77% of the Group’s newly acquired land bank is located in first- and second-tier cities with good economic fundamentals. Besides, the overall equity interests in the newly acquired land bank was approximately 70% in 2020. As at 31 December 2021, the Group had a land bank with GFA of about 28.45 million sq.m. in 32 cities in the PRC, 82% of the land bank is located in first- and second-tier cities. The Group’s equity interests in the land bank as at 31 December 2021 increased to 58% from 55% as at the end of 2019.

Optimized Financial Structure and Decreased Finance Cost

In 2020, the Group succeeded in raising funds despite the significant fluctuations in the global capital markets. It successfully seized several opportunities for financing, including being the fore-runner to issue senior notes at the beginning of the recovery in the offshore bond market in May 2020 after a heavy shock to the global capital markets. Besides, the Group took a crucial step forward in green finance practice by issuing green senior notes for twice, which received positive response from the markets. In the domestic capital market, the Group continued to deepen cooperation with various financial institutions in both traditional financing and capital markets financing, and meanwhile, continued to reduce its reliance on financing with higher costs and shorter tenor to optimize its debt structure and lower its financing cost.

Benefiting from the optimized debt structure, cash collection and cash flow management, the Group’s major financial ratios and credit ratio were further improved. As of 31 December 2020, the Group’s net debt-to-total equity ratio decreased substantially by 10.5 percentage points to 64.7%, and its cash-to-short term debt ratio was improved to approximately 2.2 times with the proportion of short-term debts decreasing to 29.1%. The onshore other borrowings to total borrowing ratios fell significantly by 14.5 percentage points to 5.9%. The Group also recorded a decrease in the cost of its newly raised financing in both the domestic and offshore capital markets and optimized the debt structure. As at the end of 2020, the weighted average cost of borrowings substantially decreased to 6.5%.

The Group has been recognized by credit rating agencies for its prudent financial management and overall strength. During the Year, Zhenro Property Holdings Company Limited, a wholly owned subsidiary of the Company, was assigned “AAA” corporate credit rating (which is the highest rating) with a stable outlook by China Chengxin International Credit Rating Co., Ltd. (中誠信國際信用評級有限責任公司) and Dagong Global Credit Rating Co., Ltd. (大公國際資信評估有限公司). Despite the increasingly complicated global situation, Moody’s and Fitch Ratings maintained the credit ratings of B1 (stable) and B+ (stable), respectively for the Company.

Improvement and Upgrade of Products, Enhancement of Management Efficiency

The Group continued to strive for improvement and upgrade of products, as well as enhancement of operation effectiveness and efficiency, so as to achieve a sustainable “high-quality growth”. During the Year, the Group focused on improving standardization, premiums, and quality of products. Having positioned itself as “Home Upgrade Master”, the Group has explored the possibilities of product innovation by taking factors such as natural environment, culture and health into account and is committed to continuously improving and upgrading the properties to suit the various needs of customers in their daily life. The Group launched the “Zhenro Oasis Community Plan (正榮綠洲社區計劃)” for building an ideal and modern community to live in. The plan aimed at comprehensively upgrading the system of intelligent security systems, community facilities and property service standards and strives to enhance customers’ living experience, providing green and comfortable property products.

In order to improve management results and efficiency, the Group has adjusted the corporate organizational structure in three aspects to improve the management effectiveness and efficiency. Firstly, the Group integrated and upgraded the functional management center of the headquarters and enhanced the strategic positioning and development planning of each management center; secondly, the Group strengthened the business standardization and refined management; finally, the Group consolidated resources of regional companies, carried out differentiated management according to the development maturity of each regional company and ensured ordered authorization, to improve decision-making efficiency. During the Year, the Group continued to improve the efficiency of project development, including the average period for a project to confirm its positioning after land acquisition has been shortened to less than a month; the average initial sale period of a project was approximately seven months; the average sell-through rate at the initial launch exceeded 70%.

Sound Corporate Governance and Enhancement of ESG Management

The Group’s investment value has been well recognized for its prudent corporate image, good operational results and excellent brand value. In the capital markets, the Group has received equity and fixed-income research coverages and positive commentaries by over 20 well-known domestic and overseas investment banks and securities houses. Besides, the Group received a number of awards and honors in 2020, including “Most Progress in IR Award” by Hong Kong Investor Relations Association, “Most Impressive Corporate Issuer 2020” by GlobalCapital China, “Asia’s Best CEO (Investor Relations)” and “Best Investor Relations Company (China)” by Corporate Governance Asia, “Certificate for Excellence in Investor Relations” by IR Magazine, “Best Investor Relations (Investment Grade & High Yield)” and “Best Use of Debt (Investment Grade & High Yield)” by Institutional Investor, “Triple A Sustainable Capital Markets Regional Awards 2020 – Corporate Issuer of the Year 2020” and “Triple A Sustainable Capital Markets Regional Awards 2020 – Best Green Bond (Real Estate)” by The Asset.

In terms of green development and environmental protection issues, the Group has put the construction of environmental-friendly green buildings as the core of its internal environmental policies, and has invested capital in supporting product design innovations, aiming at the effective utilization of materials, energy and space, and protecting the environment from the sources. Currently, Zhenro Properties has 10+ projects that obtained 2-star or 3-star green building certificates in PRC. In terms of green financing, in August 2020, Zhenro Properties established the “Zhenro Properties Green Bond Framework”, and engaged Sustainalytics, an authoritative independent ESG rating agency, to conduct an independent external review over the framework and obtain its second-party opinion. The Company then issued two rounds of green senior notes in September and November 2020, respectively. The bond issuances received overwhelming responses from the capital markets and attracted the participation from various ESG and green funds. Besides, since the beginning of 2021, the Group has issued two more rounds of green senior notes with an aggregated amount of USD700 million, with the coupons rates of 6.63% and 6.7%, respectively, and tenors of 5 years and 5.5 years, respectively, further lowering the Group’s finance cost. During the Year, the Group participated in the ESG ratings or evaluations conducted by four international institutes, of which MSCI upgraded the Company’s ESG rating to BB in December 2020. In the long run, the Company believes that the Group’s contribution to the environment will enhance the value of shareholders and investors, as well as the Company’s brand and reputation. Zhenro Properties on one hand actively fulfills its corporate social responsibilities, while on the other hand continues to enhance information disclosure of relevant topics and ratings.

Prospects

Looking ahead, Mr. Huang Xianzhi, Chairman of the Board said, “The PRC government will continue to focus on the implementation of the policies of ‘houses are for living in, not for speculation’ and ‘stabilizing land prices, property prices and expectations’, in order to facilitate the healthy and stable development of the industry. It is expected that there will be limited relaxation of various policies in the property industry in the foreseeable future, and the property industry will go through another round of deleveraging, and the gap among cities and property developers will diverge further. The essential housing demand will surge in cities and their metropolitan circles with strong economic fundamentals and fast-growing population. The property market remains strong in the long-term. The large-scale branded property developers with sound financial positions are expected to further expand their market shares relying on their own products, brands, capital, talents and operational advantages. The Group will seize opportunities for investment and focus on improving both the operational quality and efficiency. All these will enable the Group to achieve a ‘high-quality growth’.

Mr. Huang Xianzhi continued, “2021 is the final year of Zhenro Properties’ ‘New Three-Year Strategy’. To achieve the goal of ‘high-quality growth’, the Group will continue to enhance its management structure and talent echelon; the Group will continue to enhance its operational and management capabilities by improving the decision-making mechanism and standardization management to achieve management upgrade; the Group will stick to the principle of prudent investment, pay close attention to market changes, put investment at a reasonable and appropriate pace, and focus on first and second-tier cities and their metropolitan circles; the Group will focus on improving the capital efficiency and effectiveness driven by the ‘cash flow and profit’ management, and further improve its credit ratings, reduce operating expenses and finance costs, and increase profitability”.

About Zhenro Properties Group Limited

Zhenro Properties Group Limited is a leading property developer in the PRC with nationwide business presence in six key economic regions. The Group achieved contracted sales of RMB141.9 billion in 2020 and was ranked the top 20 in the Best 200 China Property Developers by Comprehensive Strength in 2020. Upholding its brand position of “Home Upgrade Master”, the Group focuses on bringing quality residences to middle class and affluent home upgraders. Zhenro Properties was listed on the Main Board of the Hong Kong Stock Exchange in 2018. It is a constituent stock in the Hang Seng Composite LargeCap/MidCap Index, Hang Seng Large-Mid Cap Value Tilt Index and the MSCI China Index and is included in the list of eligible stocks for southbound trading of the Shenzhen/ Shanghai – Hong Kong Stock Connect.