香港聯合交易所有限公司（「聯交所」）GEM的特色 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在主板上市的公司帶有較高投資風險。 有意投資的人士應了解投資於該等公司的潛在風險，並應經過審慎周詳的考慮後方作出投資決定。 由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會較於主板買賣之證券承受較大的市場波動風險， 同時無法保證在GEM買賣的證券會有高流通量的市場。 香港交易及結算所有限公司及聯交所對本報告的內容概不負責，對其準確性或完整性亦不發表任何聲明，並明確表 示概不就因本報告全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 本報告包括的資料乃遵照聯交所的GEM證券上市規則（「GEM上市規則」）的規定而提供有關源想集團有限公司（「本 公司」）及其附屬公司（統稱「本集團」）的資料。本公司董事（「董事」）願就本報告共同及個別承擔全部責任。董事在 作出一切合理查詢後確認，就彼等所知及所信，本報告所載資料在各重大方面均屬準確完整，且無誤導或欺騙成份， 及本報告並無遺漏其他事項，致使本報告所載任何陳述或本報告產生誤導。 1 源想集團有限公司 • 2020-2021年 ...

香港聯合交易所有限公司（「聯交所」）GEM的特色 1 源想集團有限公司 • 2020 年第三季度業績報告 目錄 | 公司資料 | 3 | | --- | --- | | 財務摘要 | 4 | | 管理層討論及分析 | 5 | | 其他資料 | 8 | | 截至二零二零年十二月三十一日止九個月之未經審核簡明綜合損益及其他全面收益表 | 13 | | 截至二零二零年十二月三十一日止九個月之未經審核簡明綜合權益變動表 | 14 | | 未經審核簡明綜合財務報表附註 | 15 | 源想集團有限公司 • 2020 年第三季度業績報告 2 公司資料 董事會 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在聯交所上市的公司帶有較高 投資風險。有意投資的人士應了解投資於該等公司的潛在風險，並應經過審慎周詳的考慮後方作出投資決 定。 由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會較於主板買賣之證券承受較大的市場波 動風險，同時無法保證在GEM買賣的證券會有高流通量的市場。 香港交易及結算所有限公司及聯交所對本報告的內容概不負責，對其準確性或完整性亦不發表任何聲明， 並明確表示概不就因本報告全部 ...

2020 2020 中期報告 本報告包括的資料乃遵照聯交所的GEM證券上市規則（「GEM上市規則」）的規定而提供有關源想集團有限 公司（「本公司」）及其附屬公司（統稱「本集團」）的資料。本公司董事（「董事」）願就本報告共同及個別承擔 全部責任。董事在作出一切合理查詢後確認，就彼等所知及所信，本報告所載資料在各重大方面均屬準確 完整，且無誤導或欺騙成份，及本報告並無遺漏其他事項，致使本報告或當中所載任何陳述產生誤導。 1 源想集團有限公司 • 2020 年中期報告 目錄 | 公司資料 | 3 | | --- | --- | | 財務摘要 | 4 | | 管理層討論及分析 | 5 | | 其他資料 | 14 | | 截至二零二零年九月三十日止六個月之未經審核簡明綜合損益及其他全面收益表 | 20 | | 於二零二零年九月三十日之未經審核簡明綜合財務狀況表 | 21 | | 截至二零二零年九月三十日止六個月之未經審核簡明綜合權益變動表 | 22 | | 截至二零二零年九月三十日止六個月之未經審核簡明綜合現金流量表 | 23 | | 未經審核簡明綜合財務報表附註 | 24 | 源想集團有限公司 • 2020 年中期報 ...

[Company Information](index=4&type=section&id=Company%20Information) This chapter outlines Source Network Group Limited's administrative and governance structure, including board members, committee compositions, registered office, auditor, and principal bankers, along with its stock code - The Board of Directors comprises Executive Directors Ms. Zhang Li, Mr. Luo Jiajian, Mr. Li Yongliang, Mr. Liang Weilun, and Independent Non-executive Directors Mr. Guan Zhikang, Mr. Fan Dewei, and Mr. He Haodong[6](index=6&type=chunk) - Key board committees include the Audit Committee (Chairman: Mr. He Haodong), Remuneration Committee (Chairman: Mr. Fan Dewei), and Nomination Committee (Chairman: Mr. Guan Zhikang)[6](index=6&type=chunk) - The company's auditor is KPMG, and its stock code is **8401**[7](index=7&type=chunk) [Financial Highlights](index=5&type=section&id=Financial%20Highlights) This chapter summarizes the key financial performance for the three months ended June 30, 2020, showing a significant revenue decline, substantial gross profit reduction, a shift from profit to loss, and no dividend recommendation Financial Highlights for the Three Months Ended June 30, 2020 | Metric | 2020 (HK$ '000) | 2019 (HK$ '000) | Change (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 4,887 | 5,769 | (882) | -15.3% | | Gross Profit | 2,173 | 3,514 | (1,341) | -38.2% | | Loss for the Period | (2,658) | (22) | (2,636) | -11981.8% | - The increase in loss was primarily due to decreased revenue, increased selling and distribution costs, and administrative and other operating expenses[10](index=10&type=chunk) - The Board of Directors does not recommend the payment of any dividend for the relevant period[10](index=10&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) This chapter provides an in-depth discussion of the company's operational and financial performance during the reporting period, focusing on the impact of the COVID-19 pandemic, regional market challenges and strategies, and future outlook, alongside a detailed review of financial metric changes [Business Review](index=6&type=section&id=Business%20Review) Despite the Group's active expansion in Southeast Asian markets, the advertising industry in all operating markets significantly slowed due to the COVID-19 pandemic, impairing overall performance with notable declines in both revenue and gross profit - The COVID-19 pandemic led to a significant slowdown in the advertising industry, impacting the Group's overall performance[11](index=11&type=chunk) - The Group's revenue decreased by approximately **15.3%** to approximately **HK$4,887,000**, and gross profit decreased by approximately **38.2%** to approximately **HK$2,173,000**[11](index=11&type=chunk) - The Group's principal business is providing online advertising services, including viral marketing, interactive engagement, and mass blogger services, primarily operating in Hong Kong, Taiwan, Malaysia, Indonesia, the Philippines, and Singapore[11](index=11&type=chunk) [Geographical Markets](index=6&type=section&id=Geographical%20Markets) This chapter analyzes revenue contributions and challenges across geographical markets, noting revenue declines in Hong Kong and Taiwan due to the pandemic and increased competition, with Southeast Asia's decline partially offset by new market contributions Geographical Market Revenue Contribution | Region | 2020 Revenue Share | 2019 Revenue Share | | :--- | :--- | :--- | | Hong Kong | Approx. 61.9% | Approx. 65.9% | | Taiwan | Approx. 26.8% | Approx. 24.3% | | Southeast Asia | Approx. 11.3% | Approx. 9.8% | [Hong Kong](index=6&type=section&id=Hong%20Kong) Hong Kong market revenue significantly declined by **20.4%** due to the COVID-19 pandemic, intensified competition, and economic instability, presenting a challenging operating environment - Revenue from Hong Kong decreased by approximately **20.4%** to approximately **HK$3,025,000**[13](index=13&type=chunk) - The significant revenue decline was primarily affected by the COVID-19 pandemic, increased competition among online advertising service providers, and economic instability[13](index=13&type=chunk) [Taiwan](index=6&type=section&id=Taiwan) Taiwan's operating environment remains challenging, with revenue decreasing to approximately **HK$1,312,000** due to changes in internet user behavior, increased competition, economic instability, and the pandemic - Taiwan revenue decreased to approximately **HK$1,312,000** (2019: approximately HK$1,403,000)[14](index=14&type=chunk) - Challenges include changes in internet user behavior, increased competition, economic instability, and the impact of the COVID-19 pandemic[14](index=14&type=chunk) [Southeast Asia](index=6&type=section&id=Southeast%20Asia) Total revenue in Southeast Asia slightly decreased, as contributions from newly expanded markets offset the revenue decline in Malaysia caused by the pandemic - Total Southeast Asia revenue decreased from approximately **HK$566,000** to approximately **HK$550,000**[15](index=15&type=chunk) - Revenue contributions from newly expanded markets offset the revenue decline in Malaysia caused by the COVID-19 pandemic[15](index=15&type=chunk) [Outlook](index=7&type=section&id=Outlook) The company anticipates the COVID-19 pandemic will continue to affect the advertising industry but remains confident in future sales recovery, which will be achieved by strengthening its sales team, service portfolio, member base, and client relationships, with future strategies including talent acquisition, new opportunity exploration, and enhanced member data - The COVID-19 pandemic is expected to continue impacting the advertising industry, but confidence in sales recovery remains[16](index=16&type=chunk) - Sales will be revitalized by leveraging an experienced sales team, diversified advertising services, a consolidated member base, and extensive client relationships[16](index=16&type=chunk) - Future focus includes new business maturation, elevating core markets to new heights, recruiting more business development talent, considering sponsorship of advertising-related awards to enhance profitability, and strengthening member base data[16](index=16&type=chunk) [Financial Review](index=7&type=section&id=Financial%20Review) This chapter details the financial metrics for the reporting period, explaining the reasons for decreased revenue, increased cost of services, selling and distribution costs, administrative expenses, and income tax, which ultimately led to a significant expansion of the loss for the period [Revenue](index=7&type=section&id=Revenue) The Group's revenue decreased by **15.3%** year-on-year to **HK$4,887,000**, primarily attributable to reduced sales in Hong Kong - Revenue decreased by **15.3%** from **HK$5,769,000** to **HK$4,887,000**[17](index=17&type=chunk) - Primarily attributable to reduced sales in Hong Kong[17](index=17&type=chunk) [Cost of Services](index=7&type=section&id=Cost%20of%20Services) Cost of services increased by **20.4%** year-on-year to **HK$2,714,000**, mainly due to higher system maintenance costs - Cost of services increased by **20.4%** from **HK$2,255,000** to **HK$2,714,000**[18](index=18&type=chunk) - The increase was primarily attributable to higher system maintenance costs[18](index=18&type=chunk) [Gross Profit](index=7&type=section&id=Gross%20Profit) The Group's gross profit decreased by **38.2%** year-on-year to **HK$2,173,000** - Gross profit decreased by **38.2%** from **HK$3,514,000** to **HK$2,173,000**[19](index=19&type=chunk) [Selling and Distribution Costs](index=7&type=section&id=Selling%20and%20Distribution%20Costs) Selling and distribution costs significantly increased to **HK$2,141,000**, primarily due to an increase in headcount and promotional expenses on other media platforms - Selling and distribution costs increased from **HK$942,000** to **HK$2,141,000**[20](index=20&type=chunk) - The increase was primarily attributable to an increase in headcount and promotional expenses on other media platforms[20](index=20&type=chunk) [Administrative and Other Operating Expenses](index=8&type=section&id=Administrative%20and%20Other%20Operating%20Expenses) Administrative and other operating expenses increased by **11.3%** year-on-year to **HK$3,234,000**, mainly due to increased directors' emoluments, auditor's remuneration, and net foreign exchange losses - Administrative and other operating expenses increased by **11.3%** from **HK$2,905,000** to **HK$3,234,000**[21](index=21&type=chunk) - The increase was primarily attributable to increased directors' emoluments, auditor's remuneration, and net foreign exchange losses[21](index=21&type=chunk) [Income Tax](index=8&type=section&id=Income%20Tax) Income tax increased year-on-year to **HK$103,000**, primarily due to increased taxable profits of subsidiaries and a reduction in deferred tax during the relevant period - Income tax increased from **HK$41,000** to **HK$103,000**[22](index=22&type=chunk) - The increase was primarily due to increased taxable profits of subsidiaries and a reduction in deferred tax[22](index=22&type=chunk) [Loss for the Period](index=8&type=section&id=Loss%20for%20the%20Period) The Group's net loss for the period significantly expanded to **HK$2,658,000**, primarily due to decreased revenue, increased selling and distribution costs, and administrative and other operating expenses - Net loss for the period was approximately **HK$2,658,000** (2019: approximately HK$22,000)[23](index=23&type=chunk) - The increase in net loss was primarily due to decreased revenue, increased selling and distribution costs, and administrative and other operating expenses[23](index=23&type=chunk) [Foreign Exchange Risk](index=8&type=section&id=Foreign%20Exchange%20Risk) Despite operating in multiple jurisdictions and using various functional currencies, the Group did not face any significant currency risk during the reporting period - The Group did not face any significant currency risk[24](index=24&type=chunk) - The functional and presentation currency of the Company and its subsidiaries is Hong Kong Dollars, except for certain subsidiaries whose functional currencies are New Taiwan Dollars, Malaysian Ringgit, Singapore Dollars, Indonesian Rupiah, and Philippine Pesos[24](index=24&type=chunk) [Events After the Reporting Period](index=8&type=section&id=Events%20After%20the%20Reporting%20Period) No events occurred after June 30, 2020, that could have a material impact on the Group's operations and financial performance - No events occurred after June 30, 2020, that could have a material impact on the Group's operations and financial performance[25](index=25&type=chunk) [Other Information](index=9&type=section&id=Other%20Information) This chapter provides detailed information on corporate governance, shareholding structure, and compliance, including directors' and substantial shareholders' interests, adherence to the Corporate Governance Code, share option scheme, potential conflicts of interest, and Audit Committee responsibilities [Directors' Interests in Shares, Underlying Shares, and Debentures of the Company and its Associated Corporations](index=9&type=section&id=Directors%27%20Interests%20in%20Shares%2C%20Underlying%20Shares%2C%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2020, several directors collectively held **57.14%** of the company's issued share capital through controlled corporate interests, indicating concentrated control by key management Directors' Long Position in the Company's Ordinary Shares (as at June 30, 2020) | Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Ms. Zhang Li | Interest in controlled corporation; Jointly held interest | 114,280,000 | 57.14% | | Mr. Luo Jiajian | Interest in controlled corporation; Jointly held interest | 114,280,000 | 57.14% | | Mr. Li Yongliang | Interest in controlled corporation; Jointly held interest | 114,280,000 | 57.14% | [Substantial Shareholders' Interests in Shares, Underlying Shares or Debentures of the Company](index=10&type=section&id=Substantial%20Shareholders%27%20Interests%20in%20Shares%2C%20Underlying%20Shares%20or%20Debentures%20of%20the%20Company) This chapter lists substantial shareholders, other than directors, and their interests in the company's shares as of June 30, 2020, including shares held through beneficial interests, spouse interests, and as investment managers, further revealing the company's equity concentration Substantial Shareholders' Long Position in Shares (as at June 30, 2020) | Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Source Network Investment Limited | Beneficial interest | 114,280,000 | 57.14% | | Mr. Szeto Man Wah | Spouse interest | 114,280,000 | 57.14% | | Ms. Leung Kwok Mei | Spouse interest | 114,280,000 | 57.14% | | Ms. Ng Ka Po | Spouse interest | 114,280,000 | 57.14% | | Genesis Financial Group Limited | Investment manager | 34,580,000 | 17.29% | | Genesis Grand Growth Fund | Beneficial interest | 34,580,000 | 17.29% | | Mr. Lam Wang Yuen | Interest in controlled corporation | 34,580,000 | 17.29% | | Ms. Zhang Tian | Spouse interest | 34,580,000 | 17.29% | [Purchase, Sale or Redemption of the Company's Listed Securities](index=11&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period and up to the date of this report - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[36](index=36&type=chunk) [Corporate Governance Code](index=11&type=section&id=Corporate%20Governance%20Code) The Company has complied with the Corporate Governance Code in Appendix 15 of the GEM Listing Rules, except for the non-segregation of Chairman and Chief Executive Officer duties, which are jointly performed by three Executive Directors, an arrangement the Board believes ensures effective business planning and decision-making - The Company has complied with all code provisions of the Corporate Governance Code set out in Appendix 15 to the GEM Listing Rules, except for the non-segregation of the roles of Chairman and Chief Executive Officer[37](index=37&type=chunk) - The responsibilities of the Chairman and Chief Executive Officer are jointly performed by three Executive Directors, Ms. Zhang Li, Mr. Luo Jiajian, and Mr. Li Yongliang[37](index=37&type=chunk) - The Board believes this arrangement ensures effective business planning and decision-making, as these three Executive Directors possess in-depth knowledge of the Company's management and business operations[37](index=37&type=chunk) [Code of Conduct for Securities Transactions by Directors](index=12&type=section&id=Code%20of%20Conduct%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted a code of conduct for directors' securities transactions no less exacting than required by the GEM Listing Rules, and all directors have confirmed in writing their compliance with the required standards during the reporting period and up to the report date - The Company has adopted a code of conduct for directors' securities transactions with terms no less exacting than those set out in Rules 5.48 to 5.67 of the GEM Listing Rules[41](index=41&type=chunk) - All Directors have confirmed in writing their compliance with the required standards regarding securities transactions as set out in the GEM Listing Rules during the relevant period and up to the date of this report[41](index=41&type=chunk) [Share Option Scheme](index=12&type=section&id=Share%20Option%20Scheme) The Company's share option scheme was approved on March 7, 2018, but no share options were granted, exercised, lapsed, or cancelled during the reporting period and up to the report date, nor were there any outstanding share options - The Share Option Scheme was approved by shareholders on March 7, 2018[42](index=42&type=chunk) - No share options under the Share Option Scheme were granted, exercised, lapsed, or cancelled during the relevant period and up to the date of this report[42](index=42&type=chunk) - As at June 30, 2020, there were no outstanding share options under the Share Option Scheme[42](index=42&type=chunk) [Competition and Conflicts of Interest](index=12&type=section&id=Competition%20and%20Conflicts%20of%20Interest) To the best of the Directors' knowledge, no Director, controlling shareholder, or their respective associates held any business or interest that competes or may compete with the Company's business, nor had any other conflicts of interest with the Group during the reporting period - No Director, controlling shareholder of the Company, or any of their respective associates held any business or interest that competes or may compete with the Company's business[43](index=43&type=chunk) - No such person had or may have any other conflicts of interest with the Group[43](index=43&type=chunk) [Interests of Compliance Adviser](index=12&type=section&id=Interests%20of%20Compliance%20Adviser) The Company has appointed Ascent Partners Corporate Finance Limited as its compliance adviser, which confirmed that as of June 30, 2020, neither it nor its directors, employees, or associates held any notifiable interests related to the Group - The Company has appointed Ascent Partners Corporate Finance Limited as its compliance adviser[44](index=44&type=chunk) - The compliance adviser confirmed that as at June 30, 2020, neither it nor its directors, employees, or associates held any notifiable interests related to the Group[44](index=44&type=chunk) [Audit Committee](index=13&type=section&id=Audit%20Committee) The Audit Committee, composed entirely of independent non-executive directors, has reviewed the Company's unaudited condensed consolidated financial statements for the relevant period and confirmed their compliance with applicable accounting standards, GEM Listing Rules, and statutory disclosure requirements - The Audit Committee was established on March 7, 2018, with members including Mr. He Haodong (Chairman), Mr. Fan Dewei, and Mr. Guan Zhikang[46](index=46&type=chunk) - The Audit Committee has reviewed the Company's unaudited condensed consolidated financial statements for the relevant period and is of the opinion that they comply with applicable accounting standards, the GEM Listing Rules, and statutory requirements, and that adequate disclosures have been made[46](index=46&type=chunk) [Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=14&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement presents the unaudited consolidated financial performance for the three months ended June 30, 2020, showing a shift from profit to loss, with significant increases in net loss and total comprehensive expenses, reflecting severe operating challenges Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (for the three months ended June 30, 2020) | Metric | 2020 (HK$ '000) | 2019 (HK$ '000) | Change (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 4,887 | 5,769 | (882) | -15.3% | | Cost of services | (2,714) | (2,255) | (459) | 20.4% | | Gross profit | 2,173 | 3,514 | (1,341) | -38.2% | | Other income | 650 | 352 | 298 | 84.7% | | Selling and distribution costs | (2,141) | (942) | (1,199) | 127.3% | | Administrative and other operating expenses | (3,234) | (2,905) | (329) | 11.3% | | Operating (loss)/profit | (2,552) | 19 | (2,571) | -13531.6% | | Finance costs | (3) | – | (3) | N/A | | (Loss)/profit before tax | (2,555) | 19 | (2,574) | -13547.4% | | Income tax | (103) | (41) | (62) | 151.2% | | Loss for the period | (2,658) | (22) | (2,636) | -11981.8% | | Exchange differences on translation of foreign operations | (60) | (7) | (53) | 757.1% | | Total comprehensive expense for the period | (2,718) | (29) | (2,689) | -9272.4% | | Basic loss per share (HK$) | (0.01) | (0.0001) | (0.0099) | -9900% | [Unaudited Condensed Consolidated Statement of Changes in Equity](index=15&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement presents the changes in shareholders' equity for the three months ended June 30, 2020, indicating a decrease in total equity due to the loss for the period and other comprehensive expenses Unaudited Condensed Consolidated Statement of Changes in Equity (for the three months ended June 30, 2020) | Item | Balance at April 1, 2019 (HK$ '000) | Balance at June 30, 2019 (HK$ '000) | Balance at April 1, 2020 (HK$ '000) | Balance at June 30, 2020 (HK$ '000) | | :--- | :--- | :--- | :--- | :--- | | Share capital | 2,000 | 2,000 | 2,000 | 2,000 | | Share premium | 71,988 | 71,988 | 71,988 | 71,988 | | Capital reserve | 383 | 383 | 383 | 383 | | Exchange reserve | (417) | (424) | (396) | (456) | | Accumulated losses | (12,151) | (12,173) | (17,492) | (20,150) | | **Total equity** | **61,803** | **61,774** | **56,483** | **53,765** | | Loss for the period | | (22) | | (2,658) | | Other comprehensive expense | | (7) | | (60) | | Total comprehensive expense | | (29) | | (2,718) | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=16&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This chapter provides detailed notes to the unaudited condensed consolidated financial statements, covering the company's general information, basis of financial statement preparation, revenue and segment information, other income, components of profit or loss before tax, income tax details, loss per share calculation, and dividend policy, offering users a deeper understanding [1. General Information](index=16&type=section&id=1.%20General%20Information) Source Network Group Limited is an investment holding company incorporated in the Cayman Islands, primarily engaged in providing online advertising services - The Company is an exempted company incorporated in the Cayman Islands under the Companies Law of the Cayman Islands[51](index=51&type=chunk) - The Group is principally engaged in the provision of online advertising services[52](index=52&type=chunk) [2. Basis of Preparation of Financial Statements](index=16&type=section&id=2.%20Basis%20of%20Preparation%20of%20Financial%20Statements) The unaudited condensed consolidated financial statements for the three months ended June 30, 2020, have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards and GEM Listing Rules disclosure requirements, and reviewed by the Audit Committee - The financial statements have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards, Hong Kong Generally Accepted Accounting Principles, and the disclosure requirements of the Hong Kong Companies Ordinance, and comply with the applicable disclosure provisions of the GEM Listing Rules[53](index=53&type=chunk) - The financial statements are unaudited by the Company's independent auditor but have been reviewed by the Company's Audit Committee[53](index=53&type=chunk) [3. Revenue and Segment Information](index=16&type=section&id=3.%20Revenue%20and%20Segment%20Information) The Group's revenue is entirely derived from online advertising services, with only one reportable segment; geographical data indicates Hong Kong as the primary revenue source and main location for specific non-current assets [(a) Revenue](index=16&type=section&id=(a)%20Revenue) The Group's principal business is providing online advertising services, with revenue representing service income generated from these services, and the Group has only one reportable segment - The Group's principal business is providing online advertising services, with revenue representing service income generated from these services[54](index=54&type=chunk) - The Group has only one reportable segment, which is the provision of online advertising services[54](index=54&type=chunk) [(b) Segment Reporting](index=16&type=section&id=(b)%20Segment%20Reporting) Geographical data indicates Hong Kong as the largest contributor to the Group's revenue from external customers and the primary location for specific non-current assets Geographical Information: Revenue from External Customers (for the three months ended June 30) | Region | 2020 (HK$ '000) | 2019 (HK$ '000) | | :--- | :--- | :--- | | Hong Kong | 3,025 | 3,800 | | Taiwan | 1,312 | 1,403 | | Southeast Asia | 550 | 566 | | **Total** | **4,887** | **5,769** | Geographical Information: Specific Non-current Assets (as at June 30) | Region | 2020 (HK$ '000) | 2019 (HK$ '000) | | :--- | :--- | :--- | | Hong Kong | 2,865 | 1,093 | | Taiwan | 4 | 6 | | Southeast Asia | 5 | 9 | | **Total** | **2,874** | **1,108** | [4. Other Income](index=17&type=section&id=4.%20Other%20Income) The Group's other income significantly increased, primarily benefiting from government grants received during the period Other Income (for the three months ended June 30) | Item | 2020 (HK$ '000) | 2019 (HK$ '000) | | :--- | :--- | :--- | | Interest income | 158 | 352 | | Government grants | 490 | – | | Miscellaneous income | 2 | – | | **Total** | **650** | **352** | [5. (Loss)/Profit Before Tax](index=18&type=section&id=5.%20(Loss)%2FProfit%20Before%20Tax) This chapter lists the main expense items comprising loss or profit before tax, including staff costs, auditor's remuneration, depreciation, amortization, and net foreign exchange losses Components of (Loss)/Profit Before Tax (for the three months ended June 30) | Item | 2020 (HK$ '000) | 2019 (HK$ '000) | | :--- | :--- | :--- | | Staff costs (including directors' emoluments) | 2,771 | 2,610 | | Auditor's remuneration | 224 | 50 | | Depreciation charges — owned property, plant and equipment | 22 | 39 | | Depreciation charges — right-of-use assets | 78 | – | | Amortisation of intangible assets | 301 | 85 | | Operating lease charges for office premises — minimum lease payments for rented office premises | – | 82 | | Net foreign exchange losses | 260 | 1 | | Fair value loss on financial assets at fair value through profit or loss | 28 | – | [6. Income Tax](index=18&type=section&id=6.%20Income%20Tax) Income tax expense increased, primarily due to higher taxable profits of subsidiaries and a reduction in deferred tax, with this chapter also outlining applicable profit tax rates for Hong Kong and Taiwan Income Tax (for the three months ended June 30) | Item | 2020 (HK$ '000) | 2019 (HK$ '000) | | :--- | :--- | :--- | | Current tax — Hong Kong | – | 18 | | Current tax — Other jurisdictions | 103 | 121 | | Deferred tax — origination of temporary differences | – | (98) | | **Total** | **103** | **41** | - Hong Kong profits tax provision is calculated at **16.5%** of the estimated assessable profits[63](index=63&type=chunk) - The corporate income tax rate in Taiwan is principally **20%**[63](index=63&type=chunk) [7. Loss Per Share](index=19&type=section&id=7.%20Loss%20Per%20Share) For the three months ended June 30, 2020, both basic and diluted loss per share were **HK$0.01**, reflecting the increased loss for the period and the absence of dilutive potential ordinary shares Loss Per Share (for the three months ended June 30) | Metric | 2020 (Unaudited) | 2019 (Unaudited) | | :--- | :--- | :--- | | Loss for the period attributable to equity holders of the Company (HK$ '000) | (2,658) | (22) | | Weighted average number of ordinary shares in issue during the period ('000 shares) | 200,000 | 200,000 | | Basic and diluted loss per share (HK$) | (0.01) | (0.0001) | - There were no dilutive potential ordinary shares in issue for the three months ended June 30, 2020, and 2019[65](index=65&type=chunk) [8. Dividends](index=19&type=section&id=8.%20Dividends) The Board of Directors does not recommend the payment of an interim dividend for the three months ended June 30, 2020 - The Board of Directors does not recommend the payment of an interim dividend for the three months ended June 30, 2020[66](index=66&type=chunk)

Financial Performance - The group's revenue for the year ended March 31, 2020, was approximately HKD 24,907,000, a decrease of 11.6% compared to the previous year[8] - The gross profit decreased from HKD 18,900,000 in the previous year to approximately HKD 13,348,000, a reduction of about HKD 5,552,000 or 29.4%[8] - The group reported a loss of approximately HKD 5,341,000 for the year, compared to a profit of HKD 5,372,000 in the previous year, a decrease of about HKD 10,713,000[8] - The company did not recommend the payment of any dividends for the relevant year[8] - The company's revenue decreased by approximately 11.6% to about HKD 24,907,000 for the year, down from HKD 28,174,000 in 2019[13] - Gross profit after the allocation of JAG points fell by about 29.4% to approximately HKD 13,348,000, compared to HKD 18,900,000 in 2019[13] - The company recorded a loss of approximately HKD 5,341,000 for the year, compared to a profit of HKD 5,372,000 in 2019[13] - Revenue from Hong Kong increased by approximately 1.6% to about HKD 14,665,000, up from HKD 14,428,000 in the previous year[15] - Revenue from Taiwan decreased to approximately HKD 7,572,000, down from HKD 10,439,000 in 2019, reflecting a significant decline[16] - Southeast Asia's total revenue decreased from approximately HKD 3,307,000 to HKD 2,670,000, impacted by increased competition and the pandemic[17] Membership Growth - The total membership approached 1 million by the end of the relevant year, benefiting from increased consumer demand for entertainment during the pandemic[11] - Membership numbers increased by approximately 52%, rising from about 641,000 to approximately 975,000 during the year[20] Strategic Initiatives - The group expanded its Southeast Asia strategy, successfully recruiting over 100,000 members in both the Philippines and Indonesia within the fiscal year[10] - The company revamped its website to better highlight core services and enhance sales capabilities[10] - The company plans to strengthen its talent pool and explore growth-driven partnerships and acquisition opportunities in the online advertising sector[11] - The company expects to enhance its sales through a well-experienced sales team and strong relationships with reputable clients in various industries[19] - Future strategies include sponsoring advertising-related awards to reach a broader potential customer base and enhance overall profitability[19] Cost Management - Service costs increased by approximately 24.6% to about HKD 11,559,000 from approximately HKD 9,274,000 in the previous year[31] - Selling and distribution costs rose by approximately 56.1% to about HKD 5,893,000 from approximately HKD 3,776,000 in the previous year, attributed to increased employee numbers and advertising expenses[33] - Administrative and other operating expenses increased by approximately 47.0% to about HKD 14,201,000 from approximately HKD 9,661,000 in the previous year, mainly due to higher employee salaries and director remuneration[34] Financial Position - As of March 31, 2020, the total assets of the group were approximately HKD 66,321,000, a decrease from HKD 72,499,000 in 2019, with total liabilities and equity at approximately HKD 9,838,000 and HKD 56,483,000 respectively[38] - The current ratio as of March 31, 2020, was 5.9 times, down from 6.7 times in 2019, indicating a decrease in liquidity[38] - Capital expenditures for the year ended March 31, 2020, totaled approximately HKD 2,683,000, significantly higher than HKD 942,000 in 2019, primarily for property, plant, equipment, and intangible assets[39] - The group had no significant contingent liabilities as of March 31, 2020, and maintained a debt ratio of zero, as there were no bank borrowings during the year[40][41] Risk Management - The group has identified key risks including reliance on advertising agency relationships and potential currency fluctuations, with measures in place to mitigate these risks[53][55] - The company emphasizes the importance of maintaining a robust risk management system to protect shareholder interests and assets[184] - The company has established procedures to identify, assess, and manage significant risks, ensuring the effectiveness and adequacy of its risk management and internal control systems as of March 31, 2020[186] Corporate Governance - The board consists of seven members, including four executive directors and three independent non-executive directors, complying with GEM listing rules[148] - The company has established corporate governance practices based on the GEM listing rules, ensuring transparency and accountability[142] - The company has engaged a compliance advisor, with the term starting from the listing date until the financial results of the second full fiscal year are reported[136] - The company has established a remuneration committee, audit committee, and nomination committee to oversee various corporate matters[162] Environmental, Social, and Governance (ESG) - The group is committed to operating in compliance with applicable environmental laws and minimizing negative impacts on the environment[92] - The company has a dedicated ESG working group that regularly reports to the board to assess and identify ESG-related risks and internal control systems[198] - The company has committed to sustainable development initiatives and plans to expand its disclosure scope regarding ESG performance in the future[199]

香港聯合交易所有限公司（「聯交所」）GEM的特色 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在聯交所上市的公司帶有較高投資 風險。有意投資的人士應了解投資於該等公司的潛在風險，並應經過審慎周詳的考慮後方作出投資決定。 由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會較於主板買賣之證券承受較大的市場波動風 險，同時無法保證在GEM買賣的證券會有高流通量的市場。 香港交易及結算所有限公司及聯交所對本報告的內容概不負責，對其準確性或完整性亦不發表任何聲明，並明 確表示概不就因本報告全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 本報告包括的資料乃遵照聯交所的GEM證券上市規則（「GEM上市規則」）的規定而提供有關源想集團有限公司 （「本公司」）及其附屬公司（統稱「本集團」）的資料。本公司董事（「董事」）願就本報告共同及個別承擔全部責任。 董事在作出一切合理查詢後確認，就彼等所知及所信，本報告所載資料在各重大方面均屬準確完整，且無誤導 或欺騙成份，及本報告並無遺漏其他事項，致使本報告或當中所載任何陳述產生誤導。 1 源想集團有限公司 • 2019年第三季度業 ...

由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會較於主板買賣之證券承受較大的市場波動風 險，同時無法保證在GEM買賣的證券會有高流通量的市場。 香港交易及結算所有限公司及聯交所對本報告的內容概不負責，對其準確性或完整性亦不發表任何聲明，並明 確表示概不就因本報告全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 本報告包括的資料乃遵照聯交所的GEM證券上市規則（「GEM上市規則」）的規定而提供有關源想集團有限公司 （「本公司」）及其附屬公司（統稱「本集團」）的資料。本公司董事（「董事」）願就本報告共同及個別承擔全部責任。 董事在作出一切合理查詢後確認，就彼等所知及所信，本報告所載資料在各重大方面均屬準確完整，且無誤導 或欺騙成份，及本公告並無遺漏其他事項，致使本報告或當中所載任何陳述產生誤導。 香港聯合交易所有限公司（「聯交所」）GEM的特色 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在聯交所上市的公司帶有較高投資 風險。有意投資的人士應了解投資於該等公司的潛在風險，並應經過審慎周詳的考慮後方作出投資決定。 1 源想集團有限公司 • 2019年中期業績報 ...

[Company Information](index=4&type=section&id=Company%20Information) This report details Source Network Group Limited's core information, including board members, committees, offices, auditors, legal advisors, and principal bankers - The report provides comprehensive details on Source Network Group Limited's core company information, including its board members, committee compositions, principal offices, auditors, legal advisors, and principal bankers[7](index=7&type=chunk)[8](index=8&type=chunk) [Financial Highlights](index=5&type=section&id=Financial%20Highlights) The company achieved revenue growth in Q1 2019, with a slight decrease in gross profit, and narrowed net loss due to increased interest income Financial Highlights for the Three Months Ended June 30, 2019 | Metric | Q1 2019 (HKD) | Q1 2018 (HKD) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Unaudited Revenue | Approx. 5,769,000 | Approx. 5,530,000 | +4.3% | | Unaudited Gross Profit | Approx. 3,514,000 | Approx. 3,577,000 | -1.8% | | Unaudited Loss | Approx. 22,000 | Approx. 49,000 | -55.1% | | Proposed Dividend | Not Distributed | N/A | - | - The company achieved revenue growth in Q1 2019, but gross profit slightly decreased, while net loss narrowed year-over-year due to increased interest income[11](index=11&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the group's business performance, future strategies, and financial results for the period [Business Review](index=6&type=section&id=Business%20Review) The Group's Q1 2019 revenue grew **4.3%** to **HKD 5.77 million**, driven by strong Hong Kong business growth, partially offset by Taiwan's decline and new accounting standards, with gross profit slightly down **1.8%** and period loss narrowing to **HKD 22 thousand** - The company's core business is providing online advertising services, including viral marketing, interactive engagement, and mass blogging services, primarily in Hong Kong, Taiwan, Malaysia, and Singapore[12](index=12&type=chunk) [Geographical Market Performance](index=6&type=section&id=Geographical%20Market) Hong Kong market became the primary revenue source, increasing its share from **39.7%** to **65.9%** with **72.9%** year-over-year growth, while Taiwan's share decreased from **50.7%** to **24.3%** Revenue Contribution by Region | Region | Q1 2019 Revenue Share | Q1 2018 Revenue Share | | :--- | :--- | :--- | | Hong Kong | 65.9% | 39.7% | | Taiwan | 24.3% | 50.7% | | Malaysia and Singapore | 9.8% | 9.5% | - Hong Kong market revenue increased **72.9%** year-over-year to **HKD 3.8 million**, primarily due to a lower base in the prior year period[14](index=14&type=chunk) - Taiwan market revenue decreased to **HKD 1.403 million** due to intensified competition and the impact of new accounting standards[15](index=15&type=chunk) - Malaysia's member count grew **47.4%** to **129,283**, becoming a core driver for other market growth, while Singapore's member base and revenue were below expectations[16](index=16&type=chunk) [Business Outlook](index=7&type=section&id=Outlook) The Group anticipates increased competition in online advertising but is confident in its market position due to its large member base, strong client relationships, and proprietary platform, planning to expand into Southeast Asia and enhance profitability through talent acquisition and new opportunities - Future strategic priorities include replicating Malaysia's success model across Southeast Asia, recruiting business development talent, exploring new opportunities like sponsoring advertising awards to reach potential clients, and diversifying the member base to attract more customers[18](index=18&type=chunk) [Financial Review](index=7&type=section&id=Financial%20Review) This quarter's financial performance shows revenue growth but a slight gross profit decline, with increased service costs and sales/administrative expenses, while income tax significantly decreased, leading to a narrowed net loss due to higher interest income Key Financial Item Changes | Item | Q1 2019 (HKD thousands) | Q1 2018 (HKD thousands) | Y-o-Y Change | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Revenue | 5,769 | 5,530 | +4.3% | Hong Kong sales growth | | Cost of Services | 2,255 | 1,953 | +15.5% | Increase in system maintenance costs | | Gross Profit | 3,514 | 3,577 | -1.8% | - | | Selling and Distribution Costs | 942 | 877 | +7.4% | Increase in staff headcount and promotional expenses | | Administrative and Other Operating Expenses | 2,905 | 2,613 | +11.2% | Increase in staff salaries, directors' emoluments, and professional fees | | Income Tax | 41 | 233 | -82.4% | Decrease in taxable profits of subsidiaries | | Loss for the Period | 22 | 49 | -55.1% | Increase in interest income | [Other Information](index=9&type=section&id=Other%20Information) This section covers directors' and major shareholders' interests, corporate governance practices, and other key disclosures for the period [Directors' and Major Shareholders' Interests](index=9&type=section&id=Directors'%20Interests%20in%20Shares%2C%20Related%20Shares%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2019, Executive Directors Ms. Zhang Li, Mr. Luo Jiajian, and Mr. Li Yongliang collectively held **57.14%** of the company's shares through controlled corporations, with Non-Executive Director Mr. Lin Hongyuan holding **17.36%** through Create City Financial Group Limited Directors' Shareholding (June 30, 2019) | Director Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Ms. Zhang Li | Interest in controlled corporation; jointly held with others | 114,280,000 | 57.14% | | Mr. Luo Jiajian | Interest in controlled corporation; jointly held with others | 114,280,000 | 57.14% | | Mr. Li Yongliang | Interest in controlled corporation; jointly held with others | 114,280,000 | 57.14% | | Mr. Lin Hongyuan | Interest in controlled corporation | 34,720,000 | 17.36% | Major Shareholders' Shareholding (June 30, 2019) | Shareholder Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Source Network Investment Limited | Beneficial interest | 114,280,000 | 57.14% | | Create City Financial Group Limited | Investment manager | 34,720,000 | 17.36% | | Create City Macro Growth Fund | Beneficial interest | 34,720,000 | 17.36% | [Corporate Governance](index=11&type=section&id=Corporate%20Governance%20Code) During the reporting period, the company complied with GEM Listing Rules' Corporate Governance Code, with one deviation where the Chairman and Chief Executive roles were jointly performed by three executive directors, deemed effective by the Board - The company deviated from Corporate Governance Code Provision A.2.1, which requires separation of Chairman and Chief Executive roles, explaining that these responsibilities are jointly undertaken by the three founding executive directors for efficient decision-making[38](index=38&type=chunk) [Other Disclosures](index=11&type=section&id=Other%20Disclosures) During the period, the company and its subsidiaries did not engage in any purchase, sale, or redemption of listed securities, all directors complied with securities trading codes, no share options were granted, and the Audit Committee reviewed the quarterly financial statements - As of June 30, 2019, and the report date, the company had not granted, exercised, lapsed, or cancelled any share options under its share option scheme[41](index=41&type=chunk) - The Audit Committee, comprising three independent non-executive directors, reviewed the unaudited condensed consolidated financial statements for the quarter and deemed them compliant with applicable accounting standards and disclosure requirements[44](index=44&type=chunk) [Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including the statement of profit or loss and other comprehensive income, and the statement of changes in equity [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=13&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the three months ended June 30, 2019, the company recorded **HKD 5.769 million** in revenue and **HKD 3.514 million** in gross profit, resulting in a loss for the period of **HKD 22 thousand** and basic/diluted loss per share of **HKD 0.01** Results for the Three Months Ended June 30, 2019 (Unaudited) | Item | Amount (HKD thousands) | | :--- | :--- | | Revenue | 5,769 | | Gross Profit | 3,514 | | Profit Before Tax | 19 | | Income Tax | (41) | | **Loss for the Period** | **(22)** | | Total Comprehensive Income for the Period | (29) | | Basic and Diluted Loss Per Share (HKD) | (0.01) | [Consolidated Statement of Changes in Equity](index=14&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of April 1, 2019, total equity was **HKD 61.803 million**, which decreased to **HKD 61.774 million** by June 30, 2019, due to a **HKD 22 thousand** loss for the period and exchange differences Summary of Equity Changes (Q1 2019) | Item | Amount (HKD thousands) | | :--- | :--- | | Balance as at April 1, 2019 | 61,803 | | Loss for the Period | (22) | | Other Comprehensive Income (Exchange Differences) | (7) | | **Balance as at June 30, 2019** | **61,774** | [Notes to the Financial Statements](index=15&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the unaudited condensed consolidated financial statements, covering company information, accounting policies, revenue segmentation, and specific financial items [Notes 1-2: Company Information and Basis of Preparation](index=15&type=section&id=1%20General%20Information%20%26%202%20Basis%20of%20Preparation%20of%20Financial%20Statements) Source Network Group Limited, an investment holding company registered in the Cayman Islands, primarily provides online advertising services, with its quarterly financial statements prepared under Hong Kong Financial Reporting Standards and reviewed by the Audit Committee - The Group primarily engages in providing online advertising services[49](index=49&type=chunk) - The financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards and applicable disclosure provisions of the GEM Listing Rules[50](index=50&type=chunk) [Note 3: Revenue and Segment Information](index=15&type=section&id=3.%20Revenue%20and%20Segment%20Information) The Group operates in a single reportable segment of online advertising services, with Hong Kong being the largest revenue source at **HKD 3.8 million**, accounting for approximately **66%** of total revenue, while Taiwan contributed **HKD 1.403 million** Revenue from External Customers by Region (For the Three Months Ended June 30) | Region | 2019 (HKD thousands) | 2018 (HKD thousands) | | :--- | :--- | :--- | | Hong Kong | 3,800 | 2,198 | | Taiwan | 1,403 | 2,806 | | Other | 566 | 526 | | **Total** | **5,769** | **5,530** | [Notes 4-6: Other Income, Loss Before Tax, and Income Tax](index=16&type=section&id=4.%20Other%20Income%20%26%205.%20Loss%20Before%20Tax%20%26%206.%20Income%20Tax) This quarter's other income primarily comprised **HKD 352 thousand** in interest income, with key pre-tax loss components including **HKD 2.61 million** in staff costs and **HKD 50 thousand** in auditor's remuneration, and income tax expense totaling **HKD 41 thousand** mainly from non-Hong Kong jurisdictions - Other income primarily consisted of interest income, increasing from **HKD 96 thousand** in the prior year period to **HKD 352 thousand**[55](index=55&type=chunk) - Staff costs, including directors' emoluments, were the largest expense item at **HKD 2.61 million**, a significant increase from **HKD 1.435 million** in the prior year period[56](index=56&type=chunk) - Income tax expense for the quarter was **HKD 41 thousand**, comprising **HKD 18 thousand** for Hong Kong profits tax provision, **HKD 121 thousand** for other jurisdictions, and a **HKD 98 thousand** deferred tax credit[58](index=58&type=chunk) [Notes 7-8: Loss Per Share and Dividends](index=17&type=section&id=7.%20Loss%20Per%20Share%20%26%208.%20Dividends) For the three months ended June 30, 2019, the company's loss attributable to equity holders was **HKD 22 thousand**, resulting in basic and diluted loss per share of **HKD 0.01** based on **200 million** weighted average ordinary shares, with no dividend proposed for the quarter Loss Per Share Calculation | Item | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Loss for the Period Attributable (HKD thousands) | (22) | (49) | | Weighted Average Number of Ordinary Shares in Issue (thousands) | 200,000 | 200,000 | | **Basic and Diluted Loss Per Share (HKD)** | **(0.01)** | **(0.02)** | - The Group does not recommend the payment of any dividend for the three months ended June 30, 2019[61](index=61&type=chunk)

Stream Ideas Group Limited 源想集 團 有限公 司 （於開曼群島註冊成立的有限公司） 股份代號：8401 年度報告 2018-2019 ANNUAL REPORT 2018-2019 Stock Code: 8401 Stream Ideas Group Limited 源想集 團 有限公 司 (Incorporated in the Cayman Islands with limited liability) ANNUAL REPO R T 2018-2019 年度報 告 S t o u p Limit rea m Ide a s G r e d 源想集 團 有限公 司 香港聯合交易所有限公司（「聯交所」）GEM的特色 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在主板上市的公司帶有較高投資風險。有 意投資的人士應了解投資於該等公司的潛在風險，並應經過審慎周詳的考慮後方作出投資決定。 由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會較於主板買賣之證券承受較大的市場波動風險，同 時無法保證在GEM買賣的證券會有高流通量的市場。 香港交易及結算所有限公 ...

[Company Information](index=4&type=section&id=Company%20Information) The report provides fundamental corporate governance and operational information, including board members, committee structures, principal offices, auditors, legal advisors, and principal bankers - The report provides fundamental corporate governance and operational information, including board members, committee structures, principal offices, auditors, legal advisors, and principal bankers[7](index=7&type=chunk)[8](index=8&type=chunk) [Financial Highlights](index=5&type=section&id=Financial%20Highlights) For the nine months ended December 31, 2018, the company's revenue slightly decreased by 4.5% year-on-year, with gross profit also down 4.4%, but successfully turned profitable with a profit of approximately HKD 3.50 million due to the absence of one-off listing expenses from the prior period, and no dividends are recommended - For the nine months ended December 31, 2018, the company's revenue slightly decreased by **4.5%** year-on-year, with gross profit also down **4.4%**, but successfully turned profitable with a profit of approximately **HKD 3.50 million** due to the absence of one-off listing expenses from the prior period, and no dividends are recommended[12](index=12&type=chunk) Unaudited Financial Highlights for the Nine Months Ended December 31, 2018 | Metric | Current Period (Nine Months 2018) | Prior Period (Nine Months 2017) | YoY Change | | :--- | :--- | :--- | :--- | | Unaudited Revenue | Approx. HKD 20.39 million | Approx. HKD 21.36 million | -4.5% | | Unaudited Gross Profit | Approx. HKD 13.77 million | Approx. HKD 14.41 million | -4.4% | | Unaudited Profit/(Loss) | Profit Approx. HKD 3.50 million | Loss Approx. HKD 3.12 million | Turned Profitable | | Proposed Dividend | Not distributed | N/A | - | [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the company's operational performance, financial results, and strategic outlook for the reporting period [Business Review](index=6&type=section&id=Business%20Review) During the reporting period, the company's total revenue was approximately HKD 20.39 million, a 4.5% year-on-year decrease, primarily due to revenue declines in core markets of Hong Kong and Taiwan, which were not fully offset by growth in new markets like Malaysia and Singapore, yet the company achieved a profit of approximately HKD 3.50 million by turning from loss to profit due to the absence of significant one-off listing expenses from the prior year - The company's primary business involves providing online advertising services, including viral marketing, interactive engagement, and mass blogging services, with key markets in Hong Kong, Taiwan, Malaysia, and Singapore[13](index=13&type=chunk) Revenue Contribution by Geographical Market | Region | Revenue Share (Nine Months 2018) | Revenue Share (Nine Months 2017) | | :--- | :--- | :--- | | Hong Kong | 49.1% | 53.1% | | Taiwan | 40.3% | 44.6% | | Other Markets (Malaysia & Singapore) | 10.6% | 2.3% | [Hong Kong Market](index=6&type=section&id=Hong%20Kong%20Market) Due to intensified market competition and an unstable economic environment, Hong Kong market revenue decreased by 11.7% to HKD 10.02 million from HKD 11.35 million in the prior period, prompting the company to adjust its service portfolio - Hong Kong market revenue decreased by approximately **11.7%**, from approximately **HKD 11.345 million** to approximately **HKD 10.015 million**[15](index=15&type=chunk) [Taiwan Market](index=6&type=section&id=Taiwan%20Market) The Taiwan market faced multiple challenges, including changes in internet user behavior patterns, increased competition, and economic instability, leading to a revenue decline to HKD 8.22 million - Taiwan market revenue decreased from approximately **HKD 9.522 million** to approximately **HKD 8.223 million**[16](index=16&type=chunk) [Other Markets](index=6&type=section&id=Other%20Markets) New markets like Malaysia and Singapore emerged as growth drivers, with total revenue increasing from HKD 0.49 million to HKD 2.15 million, as Malaysia saw rapid member development exceeding 110,000, while Singapore's member recruitment fell short of expectations, impacting local revenue - Revenue from other markets (Malaysia and Singapore) increased from approximately **HKD 0.489 million** to **HKD 2.151 million**, becoming a core growth driver[17](index=17&type=chunk) - As of December 31, 2018, Malaysia's member count reached **111,681**, while Singapore's member count was only **10,049**, falling below expectations[17](index=17&type=chunk) [Outlook](index=7&type=section&id=Outlook) The company anticipates intensified competition in the online advertising industry and potential conservative spending by advertisers due to the US-China trade war, yet management remains confident, planning to leverage its large member base, strong client relationships, and proprietary platform to solidify market position, while continuing to strengthen member development, expand client networks, explore new markets, and recruit more talent - The company believes its competitive advantages lie in its substantial member base, history of serving reputable clients, and strong relationships with media agencies[19](index=19&type=chunk) - Future strategies include strengthening member development, improving applications and websites, expanding client networks, exploring new markets, launching new services, and recruiting business development talent[19](index=19&type=chunk)[20](index=20&type=chunk) [Financial Review](index=7&type=section&id=Financial%20Review) During the reporting period, both the company's revenue and gross profit decreased by approximately 4.5% year-on-year, while selling and distribution costs and administrative and other operating expenses significantly increased by 56.8% and 48.6% respectively, primarily due to increased headcount, salaries, and professional fees, and income tax expenses decreased by 33.3%, ultimately resulting in a net profit of HKD 3.50 million compared to a net loss of HKD 3.12 million in the prior period, mainly attributable to the absence of substantial listing expenses incurred last year Key Income Statement Items Changes | Item | Current Period (Nine Months 2018) | Prior Period (Nine Months 2017) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | HKD 20.39 million | HKD 21.36 million | -4.5% | | Cost of Services | HKD 6.62 million | HKD 6.95 million | -4.7% | | Gross Profit | HKD 13.77 million | HKD 14.41 million | -4.4% | | Selling and Distribution Costs | HKD 2.84 million | HKD 1.81 million | +56.8% | | Administrative and Other Operating Expenses | HKD 7.15 million | HKD 4.81 million | +48.6% | | Income Tax | HKD 0.90 million | HKD 1.35 million | -33.3% | | Profit/(Loss) for the Period | HKD 3.50 million | (HKD 3.12 million) | Turned Profitable | [Other Financial Information](index=8&type=section&id=Other%20Financial%20Information) The company's functional and presentation currency is HKD, with some subsidiaries using NTD, MYR, and SGD, but no significant currency risks were faced during the reporting period, and no material events impacting the company's operations and financial performance occurred after the reporting period end - The company did not face any significant currency risks[29](index=29&type=chunk) - No significant subsequent events occurred after December 31, 2018[30](index=30&type=chunk) [Other Information](index=9&type=section&id=Other%20Information) This section details the interests of directors and principal shareholders, corporate governance practices, and other relevant disclosures [Directors' and Principal Shareholders' Interests](index=9&type=section&id=Directors'%20and%20Principal%20Shareholders'%20Interests) As of December 31, 2018, executive directors Ms. Cheung Li, Mr. Lo Ka Kin, and Mr. Lee Wing Leung collectively held 57.14% of the company's shares through their jointly controlled entity, Source Idea Investment Limited, while non-executive director Mr. Lam Wang Yuen held 17.86% through his controlled entity, Genesis Financial Group Limited, with the report detailing their shareholdings and associated interests Directors' and Principal Shareholders' Shareholdings (as of December 31, 2018) | Shareholder Name | Capacity/Nature of Interest | Number of Shares Held | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Ms. Cheung Li, Mr. Lo Ka Kin, Mr. Lee Wing Leung | Interest in controlled corporation (Source Idea Investment Limited) | 114,280,000 | 57.14% | | Mr. Lam Wang Yuen | Interest in controlled corporation (Genesis Financial Group Limited) | 35,720,000 | 17.86% | [Corporate Governance](index=11&type=section&id=Corporate%20Governance) During the reporting period, the company complied with the GEM Listing Rules' Corporate Governance Code, with one deviation: the roles of Chairman and Chief Executive Officer were not separated, but jointly performed by three executive directors (Ms. Cheung Li, Mr. Lo Ka Kin, and Mr. Lee Wing Leung), an arrangement the Board believes ensures effective business planning and decision-making, and the Audit Committee has reviewed the unaudited quarterly financial statements - The company deviated from Corporate Governance Code Provision A.2.1, as the responsibilities of the Chairman and Chief Executive Officer were not segregated but jointly performed by three executive directors[40](index=40&type=chunk) - The Audit Committee, comprising three independent non-executive directors, reviewed the financial statements for the period and deemed them compliant with applicable accounting standards and disclosure requirements[46](index=46&type=chunk) [Other Disclosure Matters](index=11&type=section&id=Other%20Disclosure%20Matters) During and up to the date of the report, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and while a share option scheme has been adopted, no options have been granted yet, and directors confirmed no competing interests with the company's business - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[39](index=39&type=chunk) - As of December 31, 2018, the company had not granted any share options under its share option scheme[42](index=42&type=chunk) [Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including the statement of profit or loss and other comprehensive income, statement of changes in equity, and their accompanying notes [Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=13&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the nine months ended December 31, 2018, the company reported revenue of HKD 20.39 million, gross profit of HKD 13.77 million, and operating profit of HKD 4.41 million, with profit for the period at HKD 3.50 million after deducting income tax of HKD 0.90 million, and total comprehensive income for the period was HKD 3.08 million after accounting for a foreign currency translation loss of HKD 0.42 million from foreign operations, resulting in basic and diluted earnings per share of 0.02 HK cents Income Statement Summary (for the Nine Months Ended December 31, 2018) | Item | Amount (HKD '000) | | :--- | :--- | | Revenue | 20,389 | | Gross Profit | 13,771 | | Operating Profit | 4,406 | | Profit for the Period | 3,504 | | Total Comprehensive Income for the Period | 3,084 | | Basic Earnings Per Share (HK cents) | 0.02 | [Unaudited Condensed Consolidated Statement of Changes in Equity](index=14&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of December 31, 2018, the company's total equity was HKD 59.65 million, an increase of HKD 3.08 million from HKD 56.57 million as of April 1, 2018, with this increase representing the total comprehensive income for the reporting period - As of December 31, 2018, the company's total equity was **HKD 59.65 million**[49](index=49&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes to the financial statements provide supplementary explanations for key accounting data, including revenue and segment information showing Hong Kong and Taiwan as primary income sources, and income tax notes explaining applicable tax rates in different jurisdictions, with no dividends recommended for the reporting period Revenue by Geographical Area (HKD '000) | Region | Nine Months 2018 | Nine Months 2017 | | :--- | :--- | :--- | | Hong Kong | 10,015 | 11,345 | | Taiwan | 8,223 | 9,522 | | Other | 2,151 | 489 | | **Total** | **20,389** | **21,356** | - The company's applicable tax rates in different regions are: Hong Kong profits tax at **16.5%** and Taiwan corporate income tax at **20%**[61](index=61&type=chunk) - The company does not recommend paying any dividends for the nine months ended December 31, 2018[61](index=61&type=chunk)