Company Overview - Sanbase Corporation Limited is incorporated in the Cayman Islands and listed on the GEM of the Hong Kong Stock Exchange under stock code 8501[1]. - The company has a board of directors comprising executive and independent non-executive members, including Mr. Wong Sai Chuen as Chairman and CEO[13]. - The company is subject to the GEM Listing Rules, which require accurate and complete information disclosure[6]. - Sanbase Corporation Limited's compliance officer and company secretary is Dr. Sung Tak Wing, Leo, ensuring adherence to regulatory requirements[15]. - The principal bankers for the company include The Hongkong and Shanghai Banking Corporation Limited and Bank of China (Hong Kong) Limited, indicating strong banking relationships[15]. Financial Performance - The annual report includes a consolidated statement of profit or loss and other comprehensive income, detailing the company's financial performance[10]. - Total revenue for the year decreased by approximately 14.2%, from HKD 481,286,000 in 2021 to HKD 413,122,000 in 2022[40]. - The Group experienced a loss before income tax of HKD 6,833,000, compared to a loss of HKD 953,000 in the previous year, representing a 617.0% increase in loss[40]. - Basic and diluted loss per share was HKD (2.90) in 2022, compared to earnings of HKD 0.20 in 2021, highlighting a significant downturn in profitability[40]. - The gross profit margin slightly improved to 5.5% in 2022 from 5.4% in 2021, indicating better cost management[40]. - Gross profit for the year was HKD 22.7 million, down 12.0% from HKD 25.8 million recorded last year[48]. - The loss attributable to owners of the Company was HKD 5.7 million, compared to a profit of HKD 0.4 million in the corresponding period of last year[49]. Revenue Breakdown - Revenue from the restacking business remained stable, indicating consistent market demand despite overall revenue decline[25]. - The design business revenue increased by more than four times during the year, reflecting a rebound after previous adjustments[25]. - The Group's PRC subsidiary reported a revenue growth of 91.2% year-on-year, demonstrating improved service quality and customer recognition[31]. - Revenue from bare shell fit-out decreased by 31.1% to HKD 172.1 million, contributing 41.7% of total revenue for the year[58]. - Revenue from restacking was HKD 200.1 million, accounting for 48.4% of total revenue, showing a slight decrease from the previous year[57]. Operational Challenges - The pandemic led to postponements of certain projects due to strict COVID-19 quarantine measures in Hong Kong and some PRC cities[47]. - The Group lowered bidding prices to secure a higher chance of success in project tenders during the challenging economic environment[47]. - The Group's operations may be affected by public health incidents, which could slow down project progress[111]. - The Group's performance analysis by operating segment is provided in note 5 of the consolidated financial statements[109]. Corporate Governance - The report outlines the corporate governance structure, including various committees such as the audit and remuneration committees[13]. - Sanbase Corporation Limited's auditor is PricewaterhouseCoopers, ensuring the integrity of financial reporting[15]. - The Group has maintained good relationships with customers and suppliers, with no material disputes reported during the year ended 31 March 2022[125]. Future Outlook - The Group plans to leverage its extensive subcontractor network and client resources to capitalize on market recovery opportunities post-pandemic[32]. - The Chairman expressed optimism about the long-term prospects of the fit-out market in Hong Kong and the PRC, despite short-term challenges[32]. - The Group expects a rebound in demand for fit-out services as companies consider lease renewals and relocations[74][78]. - The Group remains optimistic about the Grade A commercial property fit-out market in Hong Kong as the pandemic subsides, with expectations for the office leasing market to return to an upward trajectory in Q2 and Q3 2022[74][78]. Shareholder Information - The Group did not have any significant investments, material acquisitions, or disposals during the year ended 31 March 2022[71]. - The Group has not recommended the payment of a final dividend for the year ended 31 March 2022, consistent with the previous year[137]. - The Group's dividend policy aims to balance shareholder expectations with prudent fund management, subject to shareholder approval[135]. - As of March 31, 2022, the Company's distributable reserves amounted to HKD 73.4 million, a decrease from HKD 78.0 million in 2021[145]. Employee and Management Information - The Group focuses on providing competitive remuneration packages to employees to recognize their contributions[126]. - As of March 31, 2022, the total employee cost was approximately HKD 44.9 million, slightly down from HKD 45.2 million as of March 31, 2021, with 83 employees[77]. - The management team anticipates that the efforts made during the pandemic will lead to improved financial performance in the latter part of 2022[75][78]. Risk Factors - The Group is exposed to various risks, including impacts from the pandemic, reliance on subcontractors, and project-based revenue fluctuations[111]. - The Group's liquidity and financial position may be adversely affected if progress payments or retention money are not received in full and on time[120]. - The Group's fee collection and profit margins are dependent on the terms of work contracts, which may not be regular[111]. Share Option and Incentive Plans - The Share Option Scheme allows for the issuance of up to 20,000,000 shares, which is approximately 10% of the total issued share capital as of the annual report date[184]. - The Share Award Scheme permits the grant of up to 2,056,000 shares, representing about 1.03% of the total issued share capital as of the annual report date[188]. - The company aims to attract suitable personnel for its ongoing operations and development through the share incentive plan[189].

Financial Performance - Revenue for the third quarter declined by approximately 25.1% year-on-year to HK$348.5 million[25] - Net profit for the third quarter decreased by approximately 49.0% year-on-year to HK$5.1 million[26] - For the nine months ended December 31, 2021, the company's revenue decreased by 25.1% to HK$348.5 million compared to HK$465.0 million in the same period of 2020[41] - The net profit attributable to owners of the company for the nine months was HK$2.1 million, a decline of 75.8% from HK$8.8 million in the previous year[41] - The profit attributable to owners of the Company decreased by 75.8% to HK$2.1 million for the Current Period, down from HK$8.8 million for the Previous Period[124] - The Group recorded a revenue decrease of 25.1% to HK$348.5 million for the nine months ended 31 December 2021, down from HK$465.0 million for the same period in 2020[123] Gross Profit and Margins - The gross profit margin recorded a substantial year-on-year increase due to higher revenue contribution from the design business[26] - The gross profit margin improved to 8.7%, up from 7.9% year-on-year, due to an increase in the proportion of high-margin design business[41] - Gross profit decreased by 17.5% to HK$30.3 million for the Current Period, compared to HK$36.7 million for the Previous Period[123] Market Conditions - The vacancy rate of Grade A commercial properties in Hong Kong reached 9.6% by the end of December 2021, a year-on-year increase of 0.7 percentage points[25] - The vacancy rate in Central, a key area for Grade A commercial buildings, reached 8.0%[25] - The Group's performance reflects the impact of the emerging COVID-19 variant on Hong Kong's economic activities[25] - The vacancy rate for Grade A commercial properties in Hong Kong reached a recent high at the end of last year, indicating challenges in the market[131] Strategic Approach - The Group adopted a conservative approach by participating in more small-to-medium-scale projects to maintain market position and operating cash flow[26] - The Group's strategy focused on stability and development amidst challenging macroeconomic conditions[25] - The Group aims to strengthen its fit-out business in both Hong Kong and the PRC in anticipation of a market rebound as the pandemic subsides[133] - The Group plans to solidify its business presence in the PRC by participating in more and larger projects, particularly in the Guangdong–Hong Kong–Macau Greater Bay Area[132] Operational Metrics - The operating profit before income tax for the nine months was HK$8.4 million, down 37.3% from HK$13.4 million in the previous year[41] - Total comprehensive income for the period attributable to the owners for the three months ended December 31, 2021, was HK$814,000, a decline of 62.8% from HK$2,189,000 in 2020[49] - The total equity of the company as of December 31, 2021, was HK$154,495,000, an increase from HK$158,728,000 as of December 31, 2020[52] Employee and Shareholder Information - The Group had a total of 83 employees as of December 31, 2021, a decrease from 87 employees as of March 31, 2021[170] - Mr. Wong Sai Chuen holds 112,500,000 shares, representing 56.25% of the issued share capital of the company[190] - Ms. Hui Man Yee, Maggie, as the spouse of Mr. Wong Sai Chuen, is also deemed to be interested in 112,500,000 shares, equating to 56.25%[190] - The company has a significant concentration of ownership, with major shareholders holding over 5% of the shares[190] Cost Management - For the three months ended December 31, 2021, total cost of sales and administrative expenses amounted to HK$134,611,000, a decrease of 17% from HK$161,962,000 in the same period of 2020[89] - Subcontracting charges for the nine months ended December 31, 2021, were HK$294,896,000, down 26% from HK$398,360,000 in the previous year[89] - Administrative expenses decreased by HK$5.8 million or 21.7% to HK$21.0 million for the current period compared to HK$26.8 million in the previous period[153] Future Outlook - The company remains optimistic about the long-term prospects of the fit-out market in Hong Kong and the PRC despite short-to-medium term challenges[34] - The Group believes that the demand for high-end office fit-out services will rebound alongside the recovery of the economy post-pandemic[135] - The Group will closely monitor market dynamics and seek other development opportunities to enrich its business portfolio and enhance shareholder returns[135]

Company Overview - Sanbase Corporation Limited is listed on the GEM of the Hong Kong Stock Exchange under stock code 8501[1]. - The company acknowledges the higher investment risks associated with small and mid-sized companies listed on GEM[2]. - The company has a principal place of business and headquarters located in Hong Kong at 16/F, Loon Kee Building, 267-275 Des Voeux Road Central[18]. - The registered office is situated in the Cayman Islands at 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002[21]. - The Group's ultimate holding company is Madison Square International Investment Limited, with Mr. Wong Sai Chuen as the controlling shareholder[1]. Financial Performance - Revenue for the six months ended 30 September 2021 decreased by 30.1% YoY to HK$210.7 million, down from HK$301.6 million in the same period last year[39]. - Net profit attributable to owners of the Company dropped by 79.6% YoY to HK$1.4 million, compared to HK$6.8 million in the previous year[39]. - Basic and diluted earnings per share decreased by 79.7% to HK$0.70 from HK$3.45 in the previous year[39]. - Revenue for the three months ended September 30, 2021, was HK$122,209,000, a decrease of 22% compared to HK$156,624,000 for the same period in 2020[42]. - Gross profit for the six months ended September 30, 2021, was HK$19,818,000, down from HK$25,545,000 in the previous year, reflecting a decline of 22%[42]. - Profit for the period attributable to owners of the Company was HK$1,977,000 for the three months ended September 30, 2021, compared to HK$2,197,000 in the same period of 2020[44]. - The Group recorded losses for the first time in the first quarter of the fiscal year due to the impact of the COVID-19 pandemic[27]. Revenue Breakdown - Revenue from the PRC's business increased by approximately 117.3% YoY, indicating a recovery in demand for premium fit-out solutions[32]. - Revenue from Hong Kong was HK$199,227,000 for the six months ended September 30, 2021, down 32.8% from HK$296,299,000 in 2020[96]. - The Group's revenue from the PRC for the six months ended September 30, 2021, was HK$11,465,000, a decrease of 52.5% compared to HK$5,275,000 in 2020[96]. - Revenue from bare shell fit-out dropped by 50.1% to HK$96.7 million, contributing 45.9% of total revenue in the current period compared to 64.3% in the previous period[184]. Cost and Expenses - Total cost of sales and administrative expenses reduced by 25.5% to HK$116,839,000 for the three months ended September 30, 2021, from HK$156,756,000 in 2020[102]. - Subcontracting charges decreased by 26% to HK$101,285,000 for the three months ended September 30, 2021, compared to HK$136,853,000 in the same period of 2020[102]. - Administrative expenses decreased from HK$17.1 million in the previous period to HK$13.7 million in the current period, mainly due to reduced staff costs and legal fees[197]. Assets and Liabilities - Total assets as of September 30, 2021, amounted to HK$311,063,000, an increase from HK$265,409,000 as of March 31, 2021[46]. - As of September 30, 2021, total liabilities increased to HK$158,482,000, up 36.3% from HK$116,204,000 as of March 31, 2021[48]. - Trade payables rose to HK$134,983,000, a 32.1% increase from HK$102,215,000[48]. - Trade receivables increased to HK$80.4 million as of 30 September 2021, compared to HK$61.3 million as of 31 March 2021[18]. Management and Governance - The audit committee is chaired by Mr. Cheung Chi Man, Dennis, with other members including Mr. Chan Chi Kwong, Dickson[12]. - The company has appointed PricewaterhouseCoopers as its auditor[16]. - The management discussion and analysis section is included in the interim report, providing insights into the company's performance[9]. Market Conditions - The vacancy rate for Grade A office buildings in Hong Kong rose to 9.8% in September 2021, an increase of 1.2% YoY, with Kowloon East reaching 13.8%[26]. - The Group remains confident that financial performance will improve as the bare shell fit-out market gradually recovers[27]. - The Group believes that demand for fitting-out services will eventually recover post-pandemic, with plans to explore new development opportunities[175]. Future Outlook - The Company plans to enhance service quality in the PRC, broaden the subcontractor network, and develop new customers to promote business growth[34]. - The Group aims to consolidate its existing business and improve the portfolio of subcontractors to enhance service quality and competitiveness[173]. - The Group is actively seeking more projects in the PRC to diversify its geographical distribution, with signs of revenue recovery in its PRC subsidiary[174].

Financial Performance - The Group recorded its first loss since listing due to the impact of the COVID-19 pandemic, with a significant decline in revenue[21]. - Revenue for the three months ended June 30, 2021, was HK$88,483,000, a decrease of 39.0% compared to HK$144,950,000 in the same period of 2020[36]. - Gross profit for the same period was HK$7,185,000, down 52.7% from HK$15,200,000 year-on-year[36]. - The company recorded a loss attributable to owners of the Company of HK$582,000, compared to a profit of HK$4,638,000 in the same period last year, marking a 112.5% decline[36]. - Basic and diluted loss per share was HK$0.29, a decrease of 112.4% from earnings of HK$2.34 per share in the prior year[36]. - The prolonged adverse economic effects of COVID-19 in Hong Kong led to cash flow issues for project owners and customers, resulting in project delays and slowdowns[120]. - The Group reported a loss for the period of HK$272,000, compared to a profit of HK$6,510,000 in the same quarter of 2020[40]. - Total comprehensive loss for the period was HK$177,000, a significant drop from a total comprehensive income of HK$6,517,000 in the prior year[40]. Market Conditions - Economic activities in Hong Kong continued to slump, affecting overall demand for Grade A office space[21]. - The vacancy rate of Hong Kong Grade A office rose to 9.5% by the end of June 2021, an increase of 1.9% year-on-year[21]. - The Central area's vacancy rate remained high at 7.4%, indicating sluggish service demand[21]. - Demand for premium office fit-out services in Hong Kong is expected to remain weak in the second half of 2021, with high vacancy rates in Grade A commercial offices[152]. - The overall business environment remains challenging, with enterprises adopting a wait-and-see approach[21]. Strategic Adjustments - The Group adjusted its go-to-market strategy to focus on lower bidding prices for new projects and to seize opportunities in the churn works market[22]. - The Group faced challenges in tendering due to fierce competition and a conservative market attitude towards business expansion[21]. - The Group's strategy aims to maintain healthy cash flow and business scale despite lower margins in churn works projects[22]. - The economic impact of COVID-19 has led to a strategic shift in project bidding practices to secure more contracts[120]. - The Group has been aggressively tendering for new projects with lower bidding prices to increase the chances of successful bids[120]. Revenue Sources - Revenue from the PRC business nearly tripled year-on-year, indicating a strong recovery post-pandemic[28]. - Revenue from the Hong Kong segment was HK$82,943,000, down 42.2% from HK$143,533,000 in 2020, while revenue from the PRC segment increased to HK$5,540,000 from HK$1,417,000[68]. - The Group's revenue primarily comes from providing interior fit-out solutions, with a significant focus on the Hong Kong and PRC markets[65]. - The Group's revenue from restacking services increased significantly to HK$25,093,000 in 2021 from HK$7,561,000 in 2020, representing a growth of 231.5%[65]. - The Group's design services revenue rose to HK$2,917,000 in 2021 from HK$517,000 in 2020, marking a substantial increase of 463.5%[65]. - The Group's churn works revenue was HK$9,689,000, up from HK$6,763,000 in the previous year, reflecting a growth of 43.5%[65]. Cost Management - Total cost of sales and administrative expenses decreased to HK$87,732,000 in 2021 from HK$136,980,000 in 2020, representing a reduction of approximately 36%[77]. - Staff costs for the three months ended June 30, 2021, were HK$10,300,000, slightly down from HK$10,832,000 in 2020, indicating a decrease of about 4.9%[82]. - Administrative expenses were HK$6,434,000, a decrease of 11% from HK$7,230,000 in 2020[40]. - The Group's cost of sales decreased from HK$129.8 million for the Previous Period to HK$81.3 million for the Current Period, representing a decrease of approximately 37.3%[129]. Shareholding Structure - Mr. Wong Sai Chuen holds 112,500,000 shares, representing 56.25% of the issued share capital[163]. - Ms. Hui Man Yee, Maggie, holds 112,500,000 shares through her spouse's controlled corporation, also representing 56.25%[164]. - Mr. Wong Kin Kei holds 37,500,000 shares, representing 18.75% of the issued share capital[165]. - Madison Square International Investment Limited is a beneficial owner of 112,500,000 shares, accounting for 56.25%[174]. - J&J Partner Investment Group Limited is a beneficial owner of 37,500,000 shares, accounting for 18.75%[174]. - The company’s shareholding structure indicates significant control by Mr. Wong Sai Chuen and his spouse, with a combined interest of 56.25%[173]. Future Outlook - The company remains cautiously optimistic about the long-term prospects of the Grade A office fit-out market in Hong Kong, anticipating a gradual rebound in demand[29]. - The Group anticipates better performance in its PRC business, aiming to strengthen its foothold and seek collaboration opportunities in the Greater Bay Area[153]. - The Group plans to focus on fit-out services in the long run, expecting a gradual rebound in demand for Grade A office leasing as the economy stabilizes[154]. - The Group will continue to explore opportunities for launching its financing business to support long-term growth[157].

Financial Performance - Revenue decreased by 24.6% year-on-year to HKD 481.3 million[26] - Revenue decreased by 24.6% to HKD 481.3 million from HKD 638.0 million in the previous year[46] - Gross profit fell by 60.3% to HKD 25.8 million, with a gross profit margin of 5.4% compared to 10.2% last year[40][46] - Profit attributable to owners of the Company decreased by 97.6% to HKD 0.4 million from HKD 16.2 million in the previous year[47] - The group's profit for the year decreased from HKD 21.7 million last year to HKD 0.4 million for the year ended March 31, 2021[77] - Profit attributable to owners of the Company fell by 97.6% to HKD 0.4 million for the current year, compared to HKD 16.2 million last year[50] - Revenue from bare shell fit-out projects decreased by 53.9% to HKD 249.8 million, contributing 51.9% of total revenue for the year ended 31 March 2021[57] - Other income amounted to HKD 3.7 million for the current year, attributed to government subsidies under the Employment Support Scheme[67] Market Conditions - The number of projects awarded decreased from 234 in 2020 to 155 in 2021[26] - Vacancy rate of Grade A commercial buildings in Hong Kong rose to 9.5% in April 2021, a year-on-year increase of 4.7 percentage points[26] - The vacancy rate for Grade A offices in Hong Kong reached 9.5%, an increase of 4.7 percentage points year-on-year, impacting demand for high-end fit-out services[29] - The overall economic recovery in Hong Kong and globally is expected to drive demand in the local leasing and fit-out market[30] - The Chairman expressed confidence in the long-term demand for Grade A office space, anticipating a recovery in the fit-out business post-pandemic[35][38] Strategic Initiatives - The Group aims to explore business expansion into the Greater Bay Area while maintaining strong relationships with customers and subcontractors[36] - The Group's strategy includes tendering for new projects at lower bidding prices to increase the chances of securing contracts[46] - The Group is committed to providing high-quality fit-out services while delivering sustainable returns to shareholders[37] - The Group aims to maintain a healthy financial position while preparing for future development[26] - The Group is committed to minimizing its carbon footprint and natural resource consumption across all business operations[145] - The company plans to further expand its business into the Greater Bay Area and strengthen collaborations with property management companies and developers[107] - Fit-out services will continue to be the main driver of the company's future growth, leveraging its reputation and technical knowledge[108] Employee and Governance - The Group is committed to supporting its employees during challenging times[26] - The total number of employees as of March 31, 2021, was 87, down from 94 the previous year[105] - The Group provides competitive remuneration packages to employees to recognize their contributions and retain talent[149] - The Group's principal activity is investment holding, primarily engaged in providing interior fit-out solutions in Hong Kong and the PRC[135] - The Company’s board of directors includes both executive and independent non-executive directors, with a total of six directors listed in the report[184][187] Financial Position - The Group's net current assets as of 31 March 2021 were HKD 117.8 million, down from HKD 128.2 million in the previous year[73] - As of March 31, 2021, the Company's distributable reserves amounted to HKD 78.0 million, an increase from HKD 74.0 million in 2020, representing a growth of approximately 5.4%[170][176] - The Group's current ratio was 2.0 times, up from 1.6 times as of March 31, 2020[80] - The equity attributable to owners of the company was HKD 142.5 million as of March 31, 2021, compared to HKD 141.8 million as of March 31, 2020[81] Risks and Challenges - The Group's operations may be affected by external factors such as the pandemic, which could slow down project progress[137] - The Group relies on subcontractors for various trades, exposing it to risks associated with fluctuations in subcontracting costs and performance issues[137] - The business is project-based, with fee collection and profit margins dependent on contract terms, which may not be regular[137] - The Group's liquidity and financial position may be adversely affected if progress payments or retention money are not received in full and on time[147] - The Group's principal risks and uncertainties include dependency on subcontractors and the impact of public health incidents[137] Corporate Actions - The Board did not recommend the payment of a final dividend for the year ended 31 March 2021[72] - The Company has not recommended the payment of a final dividend for the year ended March 31, 2021[162] - The Group's dividend policy aims to balance shareholder expectations with prudent fund management[161] - Charitable and other donations made by the Group during the year were less than HKD 0.2 million, compared to less than HKD 0.1 million in 2020, indicating a slight increase in philanthropic efforts[171][177]

第三季度報告 SANBASE CORPORATION LIMITED 莊皇集團公 司 （於開曼群島註冊成立的有限公司） Stock code (Incorporated in the Cayman Islands with limited liability) 股份代號: 8501 THIRD QUARTERLY REPORT 2020 CHARACTERISTICS OF GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE "STOCK EXCHANGE") GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks o ...

Market Conditions - The overall vacancy rate of Grade A office buildings in Hong Kong rose to 8.1% in August 2020, with the Central District reaching a record high of 6.0%[23]. - The COVID-19 pandemic has created significant business headwinds for Hong Kong enterprises, the most severe since the SARS epidemic in 2003[23]. - Companies that initially planned for business expansion are postponing their relocation plans due to the unpredictable market environment[23]. - The Group remains confident in its leading position in the Hong Kong market and anticipates increased demand for Grade A office space as the economy recovers[25]. - Future market demand is expected to rise as more Chinese companies return to Hong Kong for listing, driving demand for fit-out projects[25]. - The outlook for the office leasing market is cautiously optimistic, with expectations of a rebound in short-to-medium-term leases due to potential demand from returning companies[175]. - The impact of the COVID-19 pandemic has intensified, creating significant business challenges, but there are signs of market adjustment that may benefit the fit-out industry[175]. Financial Performance - Revenue for the first six months decreased by approximately 13.2% from HK$347.4 million to HK$301.6 million[27]. - Revenue for the three months ended September 30, 2020, was HK$156,624, a decrease of 6.9% compared to HK$167,856 for the same period in 2019[39]. - Revenue from restacking projects increased by approximately 2.3 times year-on-year from HK$29.7 million to HK$96.9 million[27]. - Profit before income tax decreased by 25.4% from HK$12.5 million to HK$9.3 million[37]. - Profit attributable to owners of the Company increased by 48.9% from HK$4.6 million to HK$6.8 million[37]. - Basic and diluted earnings per share rose by 48.7% from HK$2.32 to HK$3.45[37]. - The Group recorded a revenue decrease of 13.2% to HK$301.6 million for the six months ended 30 September 2020, down from HK$347.4 million for the same period in 2019[168]. - Gross profit decreased by 12.1% to HK$25.5 million for the Current Period, compared to HK$29.0 million for the Previous Period[168]. - The Group's total expenses for the six months ended September 30, 2020, were HK$293,115,000, down from HK$332,791,000 in the same period of 2019[101]. Cost Management - The Group plans to implement various cost control measures to minimize operational cost pressures[25]. - The Group aims to refine its subcontractor portfolio to control operational costs more effectively[176]. - Administrative expenses increased to HK$17.1 million from HK$14.4 million, mainly due to higher staff costs and legal fees[199]. - The Group's cost of sales decreased by 13.3% to HK$276.0 million from HK$318.3 million in the previous period[190]. Assets and Liabilities - Total assets as of September 30, 2020, were HK$368,737, a slight decrease from HK$370,858 as of March 31, 2020[43]. - Total liabilities decreased from HK$218,653,000 as of March 31, 2020, to HK$213,683,000 as of September 30, 2020, representing a reduction of approximately 2.2%[45]. - Current liabilities decreased from HK$215,879,000 to HK$211,296,000, a decline of about 2.7%[45]. - Trade and retention receivables increased to HK$121,625 as of September 30, 2020, from HK$75,556 as of March 31, 2020[43]. - Trade payables decreased from HK$201,835,000 to HK$185,541,000, a decline of about 8.0%[45]. Government Support and Grants - The Group received government subsidies amounting to HK$2,483,000 during the six months ended September 30, 2020, to support employee retention amid COVID-19[103]. - Other income amounted to HK$2.5 million due to government subsidies received under the Employment Support Scheme[195]. Strategic Initiatives - The Group plans to solidify its existing business by seeking more opportunities with current clients and exploring collaborations with property management companies[176]. - The Group continues to seek collaboration opportunities with existing clients and explore partnerships with property management companies and developers to drive organic growth[179]. - A financing company was acquired mid-year to develop a new income stream through mortgage services, although it has not yet commenced operations due to market uncertainties[177]. - The acquisition of Yu Rong Capital Limited on June 1, 2020, was completed for a consideration of approximately HK$2,550,000, aimed at diversifying the Group's existing business[138]. Financial Risks and Management - The Group's activities expose it to a variety of financial risks, including market risk, credit risk, and liquidity risk[73]. - The interim condensed consolidated financial information does not include all financial risk management information and disclosures required in the annual financial statements[74]. - The Group's financial risk management policies have remained unchanged since March 31, 2020[77].

Financial Performance - The unaudited condensed consolidated results for the three months ended June 30, 2020, were presented, indicating the financial performance of the Group[24]. - The report includes a summary of financial highlights, although specific figures are not provided in the extracted content[9]. - For the three months ended June 30, 2020, the company's revenue decreased by approximately 19.3% to approximately HK$144.9 million compared to HK$179.5 million for the same period in 2019[26]. - Gross profit increased by approximately 2.6% to approximately HK$15.2 million, up from approximately HK$14.8 million in the same period in 2019[26]. - Net profit recorded a notable increase of approximately 4.4% year-on-year, demonstrating resilience amid challenging market conditions[26]. - Profit before income tax attributable to owners of the company increased by 6.7% to HK$8.6 million, up from HK$8.0 million in the same period in 2019[38]. - Profit for the period attributable to owners of the Company was HK$4,638,000, compared to HK$3,513,000 in the same period of 2019, reflecting a 32.0% increase[46]. - Total comprehensive income for the period was HK$6,517,000, up from HK$6,174,000 year-on-year, indicating a 5.6% increase[46]. - Basic and diluted earnings per share increased by 32.2% to 2.34 HK cents, compared to 1.77 HK cents in the previous year[38]. Market Conditions - The Company operates under a higher investment risk profile typical of small and mid-sized companies listed on GEM[3]. - There is a potential for high market volatility in securities traded on GEM, which may affect liquidity[4]. - In the first half of 2020, the leasing market for Grade A offices in Hong Kong saw a 53% year-on-year decrease in total gross floor area leased, marking the largest adjustment since the 2008/09 financial crisis[25]. - The overall vacancy rate of Grade A offices in Hong Kong rose to 7.6%, the highest level since September 2009[25]. - The leasing market is expected to continue to slump in the second half of the year, negatively impacting the fit-out services of Grade A office[153]. - The Group anticipates a challenging business environment in Hong Kong due to factors such as the COVID-19 pandemic and social unrest, which may negatively impact the leasing market for Grade A office space[157]. - The Group believes that a significant adjustment in Grade A office rents may lead to a rebound in the leasing market, benefiting the fitting-out services industry[157]. Corporate Governance - The Company emphasizes compliance with the GEM Listing Rules, ensuring the accuracy and completeness of the financial information presented[6]. - The Board of Directors collectively accepts full responsibility for the contents of the quarterly report, confirming no misleading or deceptive information is included[6]. - The report outlines the corporate governance structure, including various committees such as the Audit Committee and Remuneration Committee[11]. Revenue Breakdown - Revenue from the Hong Kong market was HK$143,533,000, down from HK$157,213,000, representing a decline of 8.7% year-over-year[72]. - Revenue from the PRC market significantly decreased to HK$1,417,000 from HK$22,325,000, reflecting a decline of 93.7%[72]. - The Group's revenue primarily comes from providing interior fit-out solutions, with the bare shell fit-out segment generating HK$129,472,000, down from HK$153,565,000, a decrease of 15.7%[66]. - The reinstatement segment saw revenue drop to HK$216,000 from HK$5,114,000, a decline of 95.8%[66]. - The Group's maintenance and other services generated HK$421,000, down from HK$761,000, a decrease of 44.7%[66]. - Bare shell fit-out contributed approximately 89.3% of the Group's total revenue for the three months ended 30 June 2020[123]. Cost Management - Total cost of sales and administrative expenses decreased to HK$136,359,000 in 2020 from HK$171,386,000 in 2019, a reduction of 20.5%[79]. - Subcontracting charges were HK$117,239,000 in 2020, down from HK$154,206,000 in 2019, indicating a decrease of 23.9%[79]. - Administrative expenses slightly decreased to HK$6,609,000 from HK$6,663,000, showing a reduction of 0.8%[42]. - The Group's cost of sales decreased from HK$164.7 million in the Previous Period to HK$129.8 million in the Current Period, representing a decrease of approximately 21.2%[130]. Strategic Plans - The company anticipates that external factors, such as the secondary listing of China Concepts Stocks in Hong Kong, may boost leasing demand in the second half of the year[31]. - Strategic deployment in the Guangdong-Hong Kong-Macao Greater Bay Area and Southeast Asia is planned to enhance future synergy and business opportunities[32]. - The Group plans to continue developing its business in China and overseas, particularly in Cambodia, Vietnam, Singapore, and Malaysia, to enhance its brand image[162]. - The Group aims to solidify its existing business by seeking more cooperation opportunities among current clients and exploring partnerships with other property management companies[158]. - The Group is focused on improving its subcontractor portfolio to enhance cost management while maintaining construction quality[158]. - The Group's strategy includes identifying more competitive subcontractors to strengthen cost control[158]. Employee and Shareholder Information - The Group had a total of 93 employees as of June 30, 2020, a slight decrease from 94 employees as of March 31, 2020[152]. - As of June 30, 2020, Madison Square International Investment Limited held 112,500,000 shares, representing 56.25% of the issued share capital of the company[182]. - J&J Partner Investment Group Limited held 37,500,000 shares, accounting for 18.75% of the issued share capital[182]. - The company did not purchase, sell, or redeem any of its listed securities during the current period, except for trustee purchases under the Share Award Scheme[190]. - The company adopted a Share Option Scheme on December 8, 2017, aimed at attracting and retaining employees and directors[196]. Financial Statements and Reporting - The Group's financial information is prepared in accordance with Hong Kong Financial Reporting Standards and is presented in thousands of Hong Kong dollars (HK$'000)[63]. - The unaudited condensed consolidated financial statements should be read in conjunction with the annual report for the year ended March 31, 2020[63]. - The Group has not applied any new and revised HKFRSs that are not yet effective for the current period[63].

Company Overview - Sanbase Corporation Limited is listed on the GEM of the Hong Kong Stock Exchange, which accommodates small and mid-sized companies with higher investment risks[4]. - The Group's principal activity is investment holding, primarily engaged in providing interior fit-out solutions in Hong Kong and the PRC[174]. Financial Performance - Revenue for the year ended March 31, 2020, slightly decreased by 1.9% year-on-year to HKD 638.0 million[28]. - The Group's revenue decreased by 1.9% to HKD 638.0 million for the year ended March 31, 2020, compared to HKD 650.5 million for the previous year[51]. - Gross profit decreased by 8.1% to HKD 65.1 million for the year ended March 31, 2020, down from HKD 70.8 million in the prior year[54]. - Profit attributable to owners of the Company fell by 42.3% to HKD 16.2 million for the current year, down from HKD 28.1 million for the corresponding period last year[55]. - The gross profit margin for the year ended March 31, 2020, was 10.2%, compared to 10.9% in the previous year[44]. - Revenue from bare shell fit-out projects contributed 85.0% of total revenue, amounting to HKD 542.0 million, a decrease of 2.7% from HKD 557.3 million in the previous year[58]. - The Group's overall direct margin decreased to HKD 92.8 million for the year ended March 31, 2020, down from HKD 96.0 million in the previous year, primarily due to decreases in direct margins from restacking, reinstatement, and design projects[68]. - Profit for the Group decreased to HKD 21.7 million for the year ended March 31, 2020, compared to HKD 30.3 million in the previous year[73]. Market Conditions - The company reported a significant market volatility risk associated with securities traded on GEM compared to the Main Board[5]. - The economic downturn is expected to decrease revenue and gross profit margin from bare shell fit-out services in the coming year[27]. - The global economy is projected to contract by -3% in 2020 due to the COVID-19 pandemic, significantly worse than the 2008-09 financial crisis[122]. - The uncertainty in global growth forecasts is influenced by unpredictable factors such as supply chain disruptions and changes in consumer behavior[126]. Strategic Focus - The company is focusing on new product development and technological advancements to enhance its market position[10]. - Plans for market expansion and potential mergers or acquisitions may be discussed to drive growth[10]. - The Group plans to explore business development in property management and real estate financing[38]. - The Group aims to solidify its market leadership as an interior fit-out solutions provider[38]. - The Group aims to maintain its leadership position in interior fit-out services while expanding into new markets such as Cambodia[40]. - The company plans to enhance operational efficiency through the implementation of an enterprise resources planning system[113]. Governance and Compliance - The annual report confirms that the information provided is accurate and complete in all material respects, with no misleading statements[7]. - The corporate governance report will detail the company's governance practices and board structure, which are essential for investor confidence[10]. - The Company has complied with the relevant laws and regulations, including the Companies Law and GEM Listing Rules[193][196]. Human Resources - The group has recruited 39 employees in various project management roles to enhance project execution capabilities[100]. - The Group focuses on providing competitive remuneration packages to employees to recognize their contributions[191][188]. - As of March 31, 2020, the company had 94 employees, an increase from 80 employees in the previous year[120]. Future Outlook - The management discussion and analysis section will likely outline user data trends and future outlook, including performance guidance for the upcoming fiscal year[10]. - The company plans to adjust its business or investment plans based on government policies addressing economic risks and their effects on asset valuations[130]. - The Group's performance for the year ended 31 March 2020 is outlined in the management discussion section, indicating potential growth areas[175]. Financial Position - The Group's net current assets increased to HKD 128.2 million as of March 31, 2020, compared to HKD 114.4 million in the previous year, with cash and cash equivalents rising to HKD 120.3 million from HKD 106.0 million[76]. - The current ratio improved to 1.6 times as of March 31, 2020, compared to 1.5 times in the previous year, while the gearing ratio was nil, down from 9.4%[83]. - The total proposed use of net proceeds is HKD 56.9 million, with HKD 52.2 million intended for actual use as of March 31, 2020[110]. Risk Management - The Board is aware of various risks, including reliance on subcontractors and fluctuations in subcontracting costs[181][183]. - The Group's liquidity and financial position may be adversely affected if progress payments or retention money are not received in full and on time[183][186].

Financial Performance - Sanbase Corporation reported a significant increase in revenue for Q3 2019, achieving a total of $5 million, representing a 25% growth compared to the previous quarter[11]. - The gross profit margin for Q3 2019 was reported at 60%, indicating strong operational efficiency[11]. - For the nine months ended December 31, 2019, the company undertook 205 projects, a 4.6% increase from 196 projects in the same period of 2018, with revenue rising by 19.2% to HK$481.9 million[20]. - Revenue for the nine months ended December 31, 2019, was HK$481,905,000, representing a 19.2% increase from HK$404,370,000 in the same period of 2018[28]. - Gross profit for the nine months ended December 31, 2019, was HK$45,703,000, up 10.8% from HK$41,258,000 in the previous year[28]. - Profit attributable to owners of the Company decreased by 36.0% to HK$10,225,000 for the nine months ended December 31, 2019, compared to HK$15,985,000 in 2018[28]. - Basic and diluted earnings per share for the nine months ended December 31, 2019, were HK$5.17, down from HK$7.99 in the same period of 2018[28]. - The profit for the period ending December 31, 2019, was HK$10,225,000, reflecting a significant increase compared to previous periods[36]. - The total comprehensive income for the period was HK$15,139,000, which includes exchange differences of (HK$135,000)[36]. Market Expansion and Strategy - Sanbase plans to expand its market presence in Southeast Asia, targeting a 15% market share within the next two years[11]. - The company is exploring potential acquisition opportunities to enhance its service offerings and customer base[11]. - The company is investing in new product development, with a budget allocation of $1 million for R&D in the upcoming fiscal year[11]. - The company has established partnerships with three new distributors, which are expected to contribute an additional $2 million in revenue over the next year[11]. - The Group's brand recognition and market share in the fit-out market are growing, reflecting its project management capabilities[20]. - The Group plans to focus on developing its interior fit-out business for commercial premises and pursue strategic partnerships to enhance market share[128][130]. Operational Efficiency - The company has implemented a new marketing strategy aimed at increasing brand awareness, with a projected increase in marketing spend by 40%[11]. - The company plans to expand its subcontractor portfolio to enhance flexibility in cost control, while believing that cost pressures will be temporary[25]. - The Group's overall project management and coordination services focus on Grade A offices in Hong Kong and the PRC, indicating a strategic emphasis on high-end market segments[119]. Financial Position - Sanbase Corporation's total assets increased to $10 million, reflecting a 10% growth from the previous quarter[11]. - As of December 31, 2019, total equity amounted to HK$145,743,000, with retained earnings of HK$79,749,000[36]. - The Group had net current assets of HK$123.7 million, including cash and cash equivalents of HK$134.8 million, compared to HK$114.4 million and HK$106.0 million respectively as of March 31, 2019[152]. - The current ratio was 1.6 times as of December 31, 2019, compared to 1.5 times as of March 31, 2019, while the gearing ratio was nil as of December 31, 2019, down from 9.4%[153]. Challenges and Outlook - The company remains optimistic about the commercial fit-out services market in Hong Kong and China, anticipating that short-term uncertainties will gradually fade[25]. - The management remains positive about the prospects of the interior fit-out market despite external uncertainties[127][128]. - The strong revenue growth is expected to improve the Group's financial performance as market sentiment recovers[25]. Shareholder Information - The company declared dividends of HK$6,200,000 for the period ending December 31, 2019[36]. - The ultimate holding company is Madison Square International Investment Limited, with Mr. Wong Sai Chuen as the controlling shareholder[38]. - The total number of shares that may be issued upon exercise of all options under the Share Option Scheme is 20,000,000 shares, representing approximately 10% of the total issued share capital of the Company as of the date of this quarterly report[189]. Compliance and Governance - The Group adopted HKFRS 16 "Leases" from April 1, 2019, recognizing lease liabilities of HK$7,165,000[44]. - The Group's accounting policies remain consistent with the previous financial year, except for the adoption of the new leasing standard[42]. - The Company disclosed no conflicts of interest with the Group from Directors or their close associates during the Current Period[191].