SANBASE CORP (08501) announced that on August 29, 2025, the seller (1017 Company Limited, a directly wholly-owned subsidiary of the Company) intends to sell all issued shares of the target company (Zhuanghuang China Holdings Limited) to the buyer (Aeola Investment Limited, a connected person at the subsidiary level of the Company) for a consideration of HK$1.8 million.

Upon completion of the disposal, the Company will no longer hold any interest in the target group (comprising the target company and the China subsidiary), and each of the target company and the China subsidiary will no longer be accounted for as subsidiaries of the Company.

The target company is principally engaged in investment holding of a 65% equity interest in its China subsidiary. The China subsidiary (Guangzhou Si Wu Architectural Design Co., Ltd.) is principally engaged in design and interior decoration solutions in China.

The China subsidiary recorded losses for the year ended March 31, 2025, and continued to incur losses for the three months ended June 30, 2025. The Company believes this is mainly attributable to the recent economic environment in China affecting Grade A office building leasing, resulting in fewer orders from customers whose offices are mainly located in Grade A office buildings in China.

The Company conducts strategic reviews of its assets and operations from time to time. After considering the deteriorating financial performance of the China subsidiary and the expected continued decline in demand for Grade A office building design and interior decoration solutions in China in the near term, which is anticipated to further negatively impact the China subsidiary's business, the directors believe the disposal will mitigate the adverse impact of the China subsidiary's deteriorating financial performance on the Company's overall financial performance.

Furthermore, the disposal will enable the Company to more effectively focus its capital and management resources on pursuing other growth opportunities, thereby enhancing the Company's long-term sustainability and development. The Company will continue to monitor the overall business environment in the industry and formulate appropriate development plans when appropriate.