Master Procurement & Maintenance Services Agreement. On [●], our Company (for ourselves and on behalf of our other subsidiaries) entered into a master procurement and maintenance services agreement with Shenghengda Elevator (the “Master Procurement & Maintenance Services Agreement”), pursuant to which our Group agreed to (i) procure elevators accessories from Shenghengda Elevator; and (ii) engage Shenhengda Elevator to provide accessorial installation, maintenance and repair services of such elevators (the “Procurement & Maintenance Services”). The Master Procurement & Maintenance Services Agreement has a term commencing from the Listing Date until December 31, 2022. During the Track Record Period, our Group procured elevators accessories from Shenghengda Elevator and engaged it to provide accessorial installation, maintenance and repair services for elevators installed in certain residential and commercial properties we manage. For each of the three years ended December 31, 2017, 2018 and 2019, the total amount of fees payable to Shenghengda Elevator for the Procurement & Maintenance Services amounted to approximately RMB17.8 million, RMB21.1 million and RMB27.6 million, respectively. The increase in the total amount of fees payable by our Group during the three years ended 31, 2017, 2018 and 2019 was primarily due to increase in the provision of Procurement & Maintenance Services by Shenghengda Elevator as a result of increase in the number of residential and commercial properties managed by our Group. The fees to be charged for the Procurement & Maintenance Services will be determined on arm’s length basis with reference to the government-guided price of elevator maintenance service, and the prevailing market price (taking into account the location and the conditions of the properties and the anticipated operational costs including labor costs and material costs). Our Directors estimate that the maximum annual fee payable by our Group in relation to the Procurement & Maintenance Services to be provided by Shenghengda Elevator for each of the three years ending December 31, 2020, 2021 and 2022 will not exceed RMB31.1 million, RMB37.3 million and RMB40.2 million, respectively. In arriving at the above annual caps, our Directors have considered the following factors which are considered to be reasonable and justifiable in the circumstances: • the historical transaction amounts and growth trend during the Track Record Period; • the estimated revenue to be recognized based on the existing signed contracts; • t...
