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].

10111 V INTERIM REPORT 2019 2019年中期報告 www.sanbase.com.hk 驻皇集團公司 | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-----------------------------|-------|-------|-------|-------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | दि | | | | | | | | | | | SANBASE CORPORATION LIMITED | | | | | | | | | | (Incorporated in the Cayman Islands with limited liability) (於関曼群島註冊成立的有限公司) Stock code 股份代號: 8501 CHARACTERISTICS OF GEM OF THE STOCK EXCHAN ...

Financial Performance - Revenue for the same period increased by more than 81.0% year-on-year to approximately HK$179.5 million[21]. - For the three months ended June 30, 2019, the Group's total revenue reached HK$179.5 million, representing a year-on-year increase of over 81.0% from HK$99.2 million[23][35]. - The two acquisitions in Hong Kong and China contributed revenues of HK$80.9 million and HK$22.3 million, reflecting year-on-year increases of 177.3% and 1,157.2%, accounting for 45.1% and 12.4% of the Group's total revenue, respectively[22][24]. - The gross profit for the period was HK$14.8 million, with a gross profit margin of 8.3%, down from 14.3% in the previous year[35]. - Profit before income tax was HK$8.0 million, a decrease of 5.7% compared to HK$8.5 million in the same period last year[35]. - Profit attributable to owners of the Company was HK$3.5 million, down 28.5% from HK$4.9 million in the previous year[35]. - The Group's operating profit for the period was HK$8.2 million, slightly down from HK$8.5 million in the previous year[35]. - Profit for the period attributable to owners of the Company decreased to HK$3,513,000 from HK$4,916,000, representing a decline of approximately 28.5% year-over-year[39]. - Total comprehensive income for the period attributable to owners of the Company was HK$3,459,000, down from HK$4,837,000, reflecting a decrease of approximately 28.5%[39]. - The Group's profit for the three months ended June 30, 2019, was stated after deducting the aforementioned costs, indicating a significant operational scale-up[90]. Project and Market Development - For the three months ended June 30, 2019, the company undertook 78 projects, an increase of 16.4% compared to 67 projects in the same period of 2018[21]. - The company aims to strengthen its leading position in the fit-out industry in Hong Kong to ensure continuous and stable business growth[21]. - The Group plans to focus on Grade A offices and the Guangdong-Hong Kong-Macau Greater Bay Area, anticipating new office supply of 4.75 million square meters by 2022[28][31]. - Future expansion will include exploring project opportunities in Hong Kong, China, and potentially Asia, while consolidating the benefits from recent acquisitions[29][32]. - The Group's operations are primarily focused on providing interior fit-out solutions in Hong Kong and the PRC, with a strategic emphasis on expanding its market presence in the latter[80]. - The Group's projects include various categories such as bare shell fit-out, restacking, and reinstatement, focusing on Grade A offices in Hong Kong and the PRC[117]. - The Group's role in fit-out projects includes overall project management and coordination with subcontractors[117]. Cost and Expenses - Subcontracting charges for the three months ended June 30, 2019, were HK$154,206,000, more than double the HK$77,344,000 recorded in 2018[91]. - Total cost of sales and administrative expenses for the same period was HK$171,386,000, compared to HK$90,645,000 in 2018, reflecting an increase of 89%[91]. - Cost of sales increased from HK$85.0 million for the Previous Period to HK$164.7 million for the Current Period, representing an increase of approximately 93.8%[137]. - Administrative expenses increased by approximately HK$1.1 million or 19.6% to HK$6.7 million for the Current Period compared to HK$5.6 million for the Previous Period[144]. Shareholder Information - Ms. Hui Man Yee, Maggie holds 112,500,000 shares, representing 56.25% of the issued share capital[166]. - Mr. Wong Kin Kei has an interest in 37,500,000 shares, which accounts for 18.75% of the issued share capital[166]. - Mr. Wong Sai Chuen also holds 112,500,000 shares, equivalent to 56.25% of the issued share capital[166]. - Madison Square International Investment Limited, a controlled corporation, holds 112,500,000 shares, representing 56.25% of the issued share capital[175]. - J&J Partner Investment Group Limited, another controlled corporation, holds 37,500,000 shares, which is 18.75% of the issued share capital[175]. - As of June 30, 2019, no other directors or their close associates had interests in shares or debentures of the company[180]. Financial Position - The company’s retained earnings as of 30 June 2019 were HK$73,037,000, compared to HK$69,524,000 as of 1 April 2019, showing an increase of approximately 3.6%[42]. - The company’s total equity as of 30 June 2019 was HK$142,978,000, up from HK$136,804,000 as of 1 April 2019, reflecting an increase of about 4.6%[42]. - As of 30 June 2019, the Group had net current assets of approximately HK$121.1 million, an increase from HK$114.4 million as of 31 March 2019[149]. - The Group's cash and cash equivalents balances were approximately HK$125.8 million as of 30 June 2019, up from HK$106.0 million as of 31 March 2019[149]. - The current ratio was approximately 1.5 times as at 30 June 2019, unchanged from 31 March 2019[153]. - The gearing ratio of the Group decreased to 2.2% as at 30 June 2019 from 9.4% as at 31 March 2019[153]. - The equity attributable to owners of the Company amounted to approximately HK$135.3 million as at 30 June 2019, compared to HK$131.9 million as at 31 March 2019[154]. Compliance and Governance - The financial information has been prepared in accordance with applicable Hong Kong Financial Reporting Standards and has been reviewed by the audit committee but not audited by the external auditor[46]. - The Group adopted HKFRS 16 "Leases" from April 1, 2019, resulting in the recognition of lease liabilities measured at the present value of remaining lease payments[54]. - The Group has not restated comparatives for the March 31, 2019 reporting period, as permitted under the transitional provisions of the standard[54]. - The Group's leasing activities include various offices, warehouses, and equipment, with rental contracts typically ranging from one to four years[61]. - The Group has used practical expedients such as a single discount rate for similar leases and accounting for short-term leases[56]. - The Group's leasing activities are accounted for using the present value basis, with lease liabilities reflecting the net present value of fixed lease payments[70]. Employee and Staff Costs - Staff costs rose to HK$9,547,000 in Q2 2019 from HK$8,242,000 in Q2 2018, marking a 15.9% increase[94]. - The Group had a total of 80 employees as of 30 June 2019, consistent with the number as of 31 March 2019[160]. Earnings Per Share - Earnings per share attributable to owners of the Company decreased to HK$1.77 from HK$2.46, a decrease of about 28.0%[39]. - Basic earnings per share decreased to HK$1.77 from HK$2.46, a decline of 28.0% year-over-year[103].

Financial Performance - For the fiscal year ending March 31, 2019, the company reported a revenue increase of over 72.9% year-on-year, reaching approximately HKD 650.5 million[9]. - The gross profit margin improved to 10.9% due to stringent cost control measures[9]. - The profit attributable to owners of the company surged by 307.2% to HKD 28.1 million compared to the previous year[9]. - The company's revenue increased by approximately 72.9% from about HKD 376.2 million for the year ended March 31, 2018, to about HKD 650.5 million for the year ended March 31, 2019[16]. - The profit attributable to owners increased by approximately 307.2% from about HKD 6.9 million in 2018 to about HKD 28.1 million in 2019, primarily due to increased revenue from bare-shell decoration projects[17]. - Revenue from bare-shell decoration projects accounted for approximately 85.7% of total revenue in 2019, up from 81.3% in 2018, with an increase in revenue from HKD 306.0 million to HKD 557.3 million[21]. - The overall direct profit rose from approximately HKD 49.5 million in 2018 to about HKD 95.9 million in 2019, with direct profit from bare-shell decoration projects increasing to about HKD 73.7 million[25]. Project and Market Development - The number of projects increased by 16.4% from 152 to 177, with contract amounts also rising, including one project reaching HKD 95.8 million[10]. - The company remains optimistic about the demand for commercial decoration services in Hong Kong despite a seemingly weak commercial property market[11]. - The company plans to focus on Grade A office spaces and capitalize on favorable policies such as "moving out of Central" and "green offices" to increase market share[13]. - The company aims to explore further projects in Hong Kong, China, and potentially other parts of Asia following the successful completion of two acquisitions[13]. - The company secured 5 new bare-shell decoration projects and 5 new renovation projects after April 1, 2019, with total project amounts of approximately HKD 33.3 million and HKD 12.0 million, respectively[22]. Acquisitions and Investments - The company acquired Core Group and Siwu Architectural (Guangzhou) Limited, which contributed to the revenue increase[19]. - The group acquired 60% of Core Group for HKD 9.77 million, with a contingent payment of HKD 3.76 million pending based on Core Group's audited performance[39]. - The group completed the acquisition of 65% of Siwu Guangzhou for RMB 2.401 million, with the total payment made by March 31, 2019[40]. - The group made a non-listed equity investment of approximately HKD 7.8 million in the Wonder New Economy Cambodia Fund as of March 31, 2019[41]. Financial Position and Ratios - As of March 31, 2019, the group's net current assets were approximately HKD 114.4 million, an increase from HKD 107.3 million in 2018, with cash and cash equivalents of about HKD 106.0 million, up from HKD 58.8 million in 2018[31]. - The current ratio as of March 31, 2019, was approximately 1.5 times, down from 2.3 times in 2018, primarily due to significant increases in trade receivables and contract assets[32]. - The group's debt-to-equity ratio was 9.4% as of March 31, 2019, compared to none in 2018, attributed to the utilization of bank financing for new projects[32]. - The administrative expenses for the year ended March 31, 2019, were approximately HKD 29.8 million, compared to about HKD 28.1 million in 2018, with a significant increase attributed to employee costs and professional service fees[26]. - The income tax expense for the year ended March 31, 2019, was approximately HKD 7.1 million, up from HKD 4.6 million in 2018[27]. Shareholder Information and Dividends - The board proposed a final dividend of HKD 0.031 per share for the year ended March 31, 2019, compared to HKD 0.024 per share in 2018[30]. - As of March 31, 2019, the company's reserves amounted to approximately HKD 81.5 million, down from HKD 87.3 million in 2018[79]. - The company plans to propose a dividend of no less than 20% of its after-tax profits and total comprehensive income for the fiscal year, subject to various factors[183]. Corporate Governance and Compliance - The company is committed to maintaining high standards of corporate governance, as detailed in the corporate governance report[122]. - The audit committee has reviewed the accounting principles adopted by the group and discussed internal controls and financial reporting matters, including the audited consolidated financial statements for the year ended March 31, 2019[128]. - The company has complied with relevant laws and regulations that significantly impact its business and operations[129]. - The company has adopted a standard code of conduct for securities trading, ensuring compliance by all directors during the fiscal year[146]. - The company has established clear written terms of reference for all board committees, ensuring they have sufficient resources to fulfill their responsibilities[150]. Management and Team - The company was founded in 2009 and has been led by Mr. Wang Shicun, who has over 10 years of experience in the interior decoration industry[186]. - Mr. Huang Jianji, the Chief Operating Officer, has over 17 years of experience in the decoration industry and joined the company in April 2010[189]. - Ms. Xu Manyi, an Executive Director, has been with the company since April 2015 and is responsible for daily operations and business development[191]. - The company has a strong management team with diverse backgrounds in project management, finance, and hospitality[190][194]. - The management team emphasizes the importance of compliance and strategic planning in driving the company's growth[193]. Risk Management - The company has implemented multiple risk management procedures and guidelines to identify and manage risks across various operational and financial processes[171]. - The board is responsible for evaluating and determining the nature and extent of risks the company is willing to take to achieve its strategic objectives[168]. - The company has a disclosure policy to guide directors and employees in handling confidential information and monitoring information disclosure[171]. Employee and Training - The group had a total of 80 employees as of March 31, 2019, an increase from 36 employees in 2018, reflecting a focus on attracting and retaining talent[38]. - The company secretary participated in no less than 15 hours of relevant professional training during the year ended March 31, 2019[172]. - The company plans to provide training and briefings to directors to assist in their continuous professional development[142].

m// V/ 年報 2019 www.sanbase.com.hk a SANBASE CORPORATION LIMITED 驻 皇 集 團 公 司 (於開曼群島註冊成立的有限公司) 股份代號: 8501 目 錄 綜合現金流量表 58 公司資料2 主席報告4 管理層討論與分析6 董事會報告書 15 企業管治報告 28 董事及高級管理層履歷 40 獨立核數師報告 45 綜合全面收益表 52 綜合財務狀況表 54 綜合權益變動表 56 綜合財務報表附註 59 四年財務概要 122 公司資料 | --- | --- | |-----------------------------------------------------------|---------------------------------------| | | | | 董事會 | 合規主任 | | 執行董事 | 王世存先生 | | 王世存先生 （主席、行政總裁） | 公司秘書 | | 黃健基先生 | 李子敏女士 (FCPA) | | （營運總監） 許曼怡女士 | 授權代表 | | 非執行董事 | 王世存先生 | | | 張霆邦先生 （於 2018 ...

Financial Performance - The profit attributable to the owners of the company increased by approximately 25.0% to about HKD 16.0 million from approximately HKD 12.8 million in the same period last year[13]. - Basic earnings per share for the period were HKD 0.0799, compared to HKD 0.0856 in the same period last year[13]. - Revenue for the nine months ended December 31, 2018, was HKD 404,370,000, representing a 34.2% increase from HKD 301,313,000 in the same period of 2017[15]. - Gross profit for the nine months ended December 31, 2018, was HKD 41,258,000, slightly up from HKD 40,046,000 in the previous year, indicating a stable gross margin[15]. - Operating profit for the nine months ended December 31, 2018, increased to HKD 21,924,000 from HKD 17,969,000, reflecting a growth of 22.5%[15]. - Net profit for the nine months ended December 31, 2018, was HKD 17,083,000, compared to HKD 12,845,000 in the same period of 2017, marking a 33.0% increase[15]. - The total comprehensive income for the nine months ended December 31, 2018, was HKD 17,013,000, compared to HKD 12,845,000 in the same period of 2017, showing a growth of 32.5%[15]. - The company reported a foreign exchange loss of HKD 70,000 related to overseas operations for the nine months ended December 31, 2018[15]. - The deferred tax expense for the nine months ended December 31, 2018, was HKD 5.1 million, compared to HKD 5.0 million for the same period in 2017[6]. - The company reported a tax expense of HKD 4.8 million for the nine months ended December 31, 2018, compared to HKD 5.0 million for the same period in 2017[6]. Revenue Growth - The company achieved a significant increase of 470% in revenue from maintenance, design, and other business segments, with a gross margin increase of 1,628%[9]. - Revenue for the three months ended December 31, 2018, was HKD 183,649,000, representing a 46.7% increase from HKD 125,139,000 for the same period in 2017[34]. - Revenue from the bare shell decoration projects increased from approximately HKD 236.5 million for the nine months ended December 31, 2017, to approximately HKD 330.8 million for the nine months ended December 31, 2018, representing a growth of approximately 39.8%[57]. - The revenue breakdown for the nine months ended December 31, 2018, shows that the main contributor was the fit-out services, accounting for 81.8% of total revenue at HKD 330.8 million, compared to 78.5% at HKD 236.5 million in 2017[56]. Cost Management - Administrative expenses decreased to HKD 19,334,000 for the nine months ended December 31, 2018, from HKD 22,077,000 in the previous year, indicating improved cost management[15]. - The group reported a total of HKD 382,446,000 in sales and administrative expenses for the nine months ended December 31, 2018, compared to HKD 283,344,000 for the same period in 2017, reflecting a 35% increase[37]. - Employee benefit expenses for the nine months ended December 31, 2018, totaled HKD 26,910,000, an increase of 73.6% compared to HKD 15,527,000 in the same period of 2017[39]. - Administrative expenses for the nine months ended December 31, 2018, were approximately HKD 19.3 million, down from approximately HKD 22.1 million in the previous year, with a significant increase of 91.1% when excluding listing expenses[61]. Market Expansion - The company successfully completed two acquisitions in Hong Kong and China, expanding its business coverage to previously undeveloped markets[9]. - The company secured a recent project worth HKD 53.4 million for the decoration of bare-shell apartments, indicating successful market penetration[9]. - The company remains optimistic about the demand for commercial decoration services in Hong Kong despite a soft commercial property market[10]. - The company plans to focus on the Chinese market, particularly in cities like Guangzhou and Shenzhen, which are expected to generate 4.75 million square meters of new office supply by 2022[10]. - The company aims to seek further project opportunities in Hong Kong, China, and potentially across Asia to expand its business reach and customer base[10]. - The company plans to continue expanding its market presence and enhancing its product offerings in the interior decoration solutions sector[22]. - The group has expanded its operations into mainland China as of May 2018, although revenue from Chinese clients remains below 10% of the group's total[35]. Shareholder Information - The board of directors does not recommend the payment of an interim dividend for the period, compared to no dividend in the same period last year[13]. - The company did not recommend any dividends for the three and nine months ended December 31, 2018, and 2017[45]. - As of December 31, 2018, major shareholders include Shiman Limited holding 112,500,000 shares, representing 56.25% of the issued share capital[84]. - Wang Shicun holds 112,500,000 shares through controlled entities, also accounting for 56.25% of the issued share capital[84]. - Ms. Xu Manyi, as the spouse of Wang Shicun, is deemed to have an interest in the 112,500,000 shares held by Shiman Limited, representing 56.25%[84]. - Mr. Huang Jianji has a controlled entity holding 37,500,000 shares, which is 18.75% of the issued share capital[84]. - The total number of shares held by major shareholders indicates a significant concentration of ownership within the company[84]. - The ownership structure reflects a strong alignment of interests among major shareholders and the company's management[84]. Corporate Governance - The audit committee has reviewed the unaudited consolidated financial information for the nine months ended December 31, 2018, and confirmed compliance with applicable accounting standards and GEM listing rules[102]. - No arrangements have been made for directors or their close associates to benefit from purchasing shares or debt securities of the company[87]. - There are no reported interests in competing businesses by directors or major shareholders during the period[88]. - All disclosed interests are classified as good delivery[84]. - The company has not established any arrangements for directors or their family members to gain from share purchases since listing[87]. Stock Options and Awards - The stock option plan adopted on December 8, 2017, allows for the issuance of up to 20,000,000 shares, representing approximately 10% of the total issued share capital as of the reporting date[89]. - The stock option plan is valid for ten years, with options exercisable at a price determined by the board, not lower than the higher of the closing price on the grant date or the average closing price over the five trading days preceding the grant date[92]. - No stock options have been granted under the stock option plan since its adoption up to the reporting date[93]. - The share award plan approved on October 16, 2018, allows for the issuance of up to 16,000,000 shares, representing about 8% of the total issued share capital as of the reporting date[95]. - No shares have been granted under the share award plan since its adoption up to the reporting date[95]. - The company has not purchased, sold, or redeemed any of its listed securities during the reporting period, except for transactions conducted by the trustee under the share award plan[97].