On November 10, 2021, the 4th phase of the "Golden Stock Research" research program for 100 listed companies, organized by WisdomTree Finance and co-sponsored by Guoyuan International, the Investment Research Institute, the Value Investment West Lake Association and the Chamber of Hong Kong Listed Companies, was officially opened.

This research activity was held in Shanghai for two days (November 10-11), and professional investors visited five high-quality listed companies in Hong Kong: C&D International Group (1908.HK), Qeeka Home (1739.HK), Greentown Management Holdings (9979.HK), Lanson Green Property (0106.HK) and Lanson Green Life (1965.HK). We conducted field research and in-depth communication.

In the afternoon of November 10, more than ten professional investors from all over China came to Qeeka Home (1739.HK) (the "Company") headquarters in Shanghai, where they had in-depth exchanges and discussions with the management while gaining an in-depth understanding of the company, and the atmosphere was hot.

I. Fundamentals and recent developments

Qeeka Home (1739.HK), officially established in 2007, is one of the largest SaaS service platforms for decoration companies in China. The company provides marketing, supply chain gathering and innovative value-added services to decoration companies through a total SaaS-based solution, and it also operates several well-known interior design and decoration brands, and provides services such as decoration capital protection and third-party supervision to users. The Company was listed on the Main Board of the Hong Kong Stock Exchange on July 12, 2018, making it the No. 1 stock in the home improvement vertical platform.

Since its establishment, the company has taken the responsibility of improving the efficiency of the industry and user experience, continuously innovating and developing to create a new model of home decoration that integrates online and offline, providing users with integrated online and offline, full-process and high-efficiency quality home decoration services. According to the data, the online transaction volume of Internet home decoration in China will be RMB 56.7 billion in 2020, and is expected to reach RMB 142.6 billion by 2025, with huge market space. The company, as one of the head enterprises of Internet home improvement services, is expected to benefit from it in the long term.

In the first half of 2021, the Company achieved total revenue of approximately RMB524 million, representing an increase of approximately 66.5% year-on-year, and achieved adjusted net profit attributable to the mother company of approximately RMB20.54 million, representing an increase of approximately 286.3% year-on-year. Specifically, the Company's revenue from SaaS and extended services was approximately RMB309 million, representing a year-over-year increase of approximately 38.4%, while revenue from interior design and construction and other businesses was approximately RMB215 million, representing a year-over-year increase of approximately 135.1%. During the period, the number of active paid merchants reached 5,667, representing a year-on-year increase of approximately 33.8%; the number of sales leads reached approximately 384,216, representing a year-on-year increase of approximately 16.4%; and the average selling price per lead reached RMB691, representing a year-on-year increase of approximately 19.2%.

The company has established a flourishing eco-system, cooperated with tens of thousands of paid decoration enterprises, recommended millions of effective sales leads for decoration enterprises, and successfully landed in more than 300 cities. It is the preferred platform for home improvement companies seeking value-added services and users seeking home improvement services on the Internet.

Recently, the industry research institution Leadleo Research Institute released "How to achieve industrial upgrading in the trillion market home decoration industry by relying on the Internet? As mentioned in the report, with the gradual maturation of Internet home improvement, online full-process home improvement services are favored by consumers, one-stop and customized consumption trends are emerging, and providing a full set of home improvement service solutions will become the mainstream development trend of the industry in the future, and Qeeka Home is recommended in the report.

II.Second, Q & A

1. What changes have been made to the way traditional decorators get customers?
The most common mode of customer acquisition is for salesmen to push to get customers, but this model is gradually being eliminated, in Shanghai, for example, many companies have canceled this business, because the demand for renovation in Shanghai urban areas to second-hand decoration, few new neighborhoods can go to the ground, second-hand houses are too fragmented, it is difficult to push and other ways to get customers through offline, even if there are many new properties open, but most of them are relatively remote, easy to Beyond the service radius of the installation enterprises. There is also a common method of customer acquisition is to invest in television advertising or outdoor media, customer acquisition through brand advertising, but this way of customer acquisition on the one hand, the cost of investment is relatively large, on the other hand, is more suitable for the larger revenue scale of medium and large installed enterprises, now most of the installed enterprises will choose to cooperate with home improvement platforms such as Qeeka Home, direct access to the platform's accurate users, or use the platform's software system for sharing fission, etc. The way to get customers.

2. What is the distribution of the company's customers?Are the company's sales leads exclusively recommended to a specific company or randomly?
Overall, the company's customers are distributed in more than 100 cities across China, but the overall trend is that the larger the city, the higher the penetration rate. The company's four largest cities are Beijing, Shanghai, Guangzhou and Shenzhen, because of the large population in these cities, but also because we think the most important reason is that the enthusiasm of second-hand housing and renovation companies in these cities to embrace the Internet and their cultural level are relatively higher, and the customers' requirements and education level are also higher, which drives the industry to be more easily computerized.

First of all, the company will recommend each sales lead to 2~3 renovation companies on average, because users actually want to compare them, which is a consideration from the user's standpoint. Secondly, the sales leads are not randomly assigned, they are optimally matched according to the historical turnover rate, professionalism, service radius, and capacity remaining of the decoration companies.

3. For the general consumer users, how many consumers have installed Qeeka Home App software? How does the company promote it?
In the first half of this year, the company aggregated more than 384,000 sales leads, with a year-on-year growth of about 16%, behind each sales lead is a highly effective potential customer. The company's promotion is also omnichannel, including our own media, offline traffic, online traffic, covering Baidu, Headline, Tencent, etc., of which Baidu is also the second largest shareholder of the company.

Despite the omni-channel promotion, people may have the feeling that Qeeka Home is not well known by the majority of consumers. We think that this is mainly due to the fact that decoration is a low-frequency thing, so consumers usually don't pay too much attention to the relevant information, so it is actually a difficult thing to establish a pure user traffic platform in the low-frequency field. So for us, we provide a service that is more efficient than the renovation company's own advertising to get customers.