Sam Woo Construction Group Limited - Interim / Quarterly Report 2017

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SAM WOO CONSTRUCTION GROUP LIMITED 三和建築集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 3822)

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2016

The board of directors (the “Board”) of Sam Woo Construction Group Limited (the “Company”) is pleased to present the unaudited interim results of the Company and its subsidiaries (collectively the “Group”) for the six months ended 30 September 2016 (the “Period”), together with the comparative figures for the corresponding period in 2015 (the “Previous Period”). These information should be read in conjunction with the annual financial statements for the year ended 31 March 2016.

annual financial statements for the year	ended 31 March 2016.
HIGHLIGHTS
	1H 2016/17	1H 2015/16
Revenue	HK$479 million	HK$540 million
Profit for the period	HK$31 million	HK$104 million
Earnings per share_(note)_	1.84 HK cents	6.35 HK cents
Interim dividend_(note)_	0.5 HK cents	1.25 HK cents
	30 September 2016	31 March 2016
Net gearing	0%	13%
Current ratio	1.6x	1.7x
Total equity	HK$656 million	HK$655 million
Aggregate value of major contracts	about HK$1,270 million
on hand	yet to complete

Note:

For comparative purpose, earnings per share and interim dividend for the Previous Period were restated as if the share subdivision of HK$0.01 each into 4 shares of HK$0.0025 each effective in December 2015 was taken place on 1 April 2015.

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2016

Note
Revenue
3
Cost of sales
4
Gross profit
Other income and gain, net
Administrative expenses
4
Operating profit
Finance income
5
Finance costs
5
Finance costs, net
5
Profit before income tax
Income tax expense
6
Profit and total comprehensive income
for the period
Profit and total comprehensive income
attributable to equity holders
of the Company
Basic and diluted earnings per share (HK cents)
7

Unaudited
Six months ended
30 September
2016
2015
HK$’000
HK$’000
478,503
540,036
(419,881)
(413,888)
58,622
126,148
85
225
(20,908)
(15,147)
37,799
111,226
939
1,509
(5,217)
(5,742)
(4,278)
(4,233)
33,521
106,993
(2,691)
(3,305)
30,830
103,688
30,830
103,688
(Restated)
1.84
6.35

CONDENSED CONSOLIDATED INTERIM BALANCE SHEET

AS AT 30 SEPTEMBER 2016

Unaudited 30 September 2016 Note *HK$’000* ASSETS Non-current assets Plant and equipment 599,553 Deferred income tax assets 605 Deposits and prepayments 4,809 604,967 Current assets Trade and retention receivables 9 176,212 Deposits, prepayments and other receivables 1,399 Amounts due from customers for contract work 20,341 Income tax recoverable 116 Restricted bank balances 20,713 Short term bank deposit – Cash and cash equivalents (excluding bank overdraft) 390,073 608,854 Total assets 1,213,821 EQUITY Capital and reserves Share capital 4,200 Reserves 652,281 Total equity 656,481 LIABILITIES Non-current liabilities Long-term borrowings 105,979 Deferred income tax liabilities 45,928 Amount due to a director 20,713 172,620	Audited 31 March 2016 HK$’000 605,566 131 2,617
	608,314
	295,954 592 28,562 116 20,559 17,797 183,060
	546,640
	1,154,954

	4,200 650,851
	655,051
	120,873 43,782 20,559
	185,214

CONDENSED CONSOLIDATED INTERIM BALANCE SHEET (CONTINUED) AS AT 30 SEPTEMBER 2016

Unaudited 30 September 2016 Note *HK$’000* Current liabilities Trade and retention payables 10 75,240 Accruals and other payables 40,683 Amounts due to customers for contract work 107,594 Borrowings 146,728 Income tax payable 14,475 384,720 Total liabilities 557,340 Total equity and liabilities 1,213,821	Audited 31 March 2016 HK$’000 87,307 16,298 28,672 167,444 14,968
	314,689
	499,903
	1,154,954

NOTES:

1 GENERAL INFORMATION AND KEY EVENTS

General information

The Company was incorporated in the Cayman Islands on 17 September 2012 as an exempted company with limited liability under the Companies Law, Cap 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands. The address of the Company’s registered office is Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands.

The Company is an investment holding company. The Company and its subsidiaries now comprising the Group (together the “Group”) are principally engaged in foundation works and ancillary services in Hong Kong and Macau.

The shares of the Company are listed on the Main Board of The Stock Exchange of Hong Kong Limited.

These condensed consolidated interim financial information is presented in Hong Kong dollars (“HK$”), unless otherwise stated and was approved for issue on 29 November 2016.

This condensed consolidated interim financial information has not been audited.

2 BASIS OF PREPARATION AND ACCOUNTING POLICIES

2.1 Basis of preparation

This condensed consolidated interim financial information for the six months ended 30 September 2016 has been prepared in accordance with Hong Kong Accounting Standard (“HKAS”) 34, “Interim Financial Reporting” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”). The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 March 2016, which have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) and has been prepared under the historical cost convention.

2.2 Accounting policies

The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 March 2016, as described in those annual financial statements.

Amendments to HKFRSs effective for the financial year ended 31 March 2016 are not expected to have a material impact on the Group.

There are no amended standards or interpretations that are effective for the first time for this interim period that could be expected to have a material impact on the Group.

3 REVENUE AND SEGMENT INFORMATION

Revenue, which is also the Group’s turnover, represents gross contract receipts on foundation works and ancillary services in the ordinary cause of business. Revenue recognised is as follows:

	Unaudited
	Six months ended
	30 September
	2016	2015
	*HK$’000*	HK$’000
Foundation works and ancillary services	478,503	540,036

The chief operating decision-maker has been identified as the executive directors of the Company. The executive directors regard the Group’s business as a single operating segment and review financial information accordingly. Therefore, no segment information is presented.

4 EXPENSES BY NATURE

EXPENSES BY NATURE
Cost of sales Construction contracts costs_(note (a)) Depreciation Repair and maintenance Others Administrative expenses Depreciation Operating leases rental in respect of – Office premises and storage premises – Directors’ quarters Professional fees Staff costs, including directors’ emoluments(note (b))_ Others Total cost of sales and administrative expenses	Unaudited Six months ended 30 September 2016 2015 *HK$’000* HK$’000 400,464 401,360 13,942 7,755 5,233 3,469 242 1,304 419,881 413,888 254 227 3,533 2,483 1,084 1,084 2,256 (973) 9,151 7,794 4,630 4,532 20,908 15,147 440,789 429,035
		413,888
		227 2,483 1,084 (973) 7,794 4,532
		15,147
		429,035

Notes:

(a) Construction contract costs included but not limited to costs of construction materials, staff costs (refer to note (b) below), consultancy fee, parts and consumables, subcontracting charges and transportation.

(b) Total staff cost Less: amount included in construction contracts costs or capitalised in work-in progress 5 FINANCE INCOME AND COSTS Finance income: – Interest income on bank deposits Finance costs: – Interest expense on bank loans – Interest expense on obligations under finance leases – Interest expense on amount due to a director Finance costs, net	Unaudited Six months ended 30 September 2016 2015 *HK$’000* HK$’000 65,041 95,926 (55,890) (88,132) 9,151 7,794 Unaudited Six months ended 30 September 2016 2015 *HK$’000* HK$’000 939 1,509 (3,104) (3,732) (1,959) (1,781) (154) (229) (5,217) (5,742) (4,278) (4,233)

6 INCOME TAX EXPENSE

Hong Kong profits tax and Macau complementary tax have been provided at the rate of 16.5% and 12%, respectively, on the estimated assessable profit for the Period and the Previous Period.

Hong Kong profits tax Current income tax Over-provision in prior year Deferred income tax Macau profits tax Current income tax	Unaudited Six months ended 30 September 2016 2015 *HK$’000* HK$’000 1,019 228 – (62) 1,672 (106) – 3,245 2,691 3,305	Unaudited Six months ended 30 September 2016 2015 *HK$’000* HK$’000 1,019 228 – (62) 1,672 (106) – 3,245 2,691 3,305
		3,305

7 EARNINGS PER SHARE (a) Basic

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the respective periods. The weighted average number of ordinary shares used for such purpose were restated as if the share subdivision of HK$0.01 each into 4 shares of HK$0.0025 each effective in December 2015 (“Share Subdivision”) were taken place on 1 April 2015.

Profit attributable to equity holders of the Company (HK$’000) Weighted average number of ordinary shares for the purpose of calculating basic earnings per share (thousands) Basic earnings per share (HK cents)	Unaudited Six months ended 30 September 2016 2015 30,830 103,688 (Restated) 1,680,000 1,633,224 1.84 6.35	Unaudited Six months ended 30 September 2016 2015 30,830 103,688 (Restated) 1,680,000 1,633,224 1.84 6.35

		6.35

(b) Diluted

Diluted earnings per share is of the same amount as the basic earnings per share as there were no potential dilutive ordinary shares outstanding at Period end.

8 DIVIDENDS

On 29 November 2016, the Board resolved to declare an interim dividend of 0.5 HK cents per shares for the Period (2015: 1.25 HK cents, as restated for the Share Subdivision).

Final dividends of HK$63,000,000 relating to the year ended 31 March 2015 and HK$29,400,000 relating to the year ended 31 March 2016 were declared in September 2015 and September 2016, respectively.

9 TRADE AND RETENTION RECEIVABLES

Unaudited 30 September 2016 *HK$’000* Trade receivables 115,874 Retention receivables 60,338 176,212	Audited 31 March 2016 HK$’000 203,833 92,121
	295,954

The credit period granted to trade customers other than for retention receivables was within 45 days. The terms and conditions in relation to the release of retention vary from contract to contract, which may be subject to practical completion, the expiry of the defect liability period or a pre-agreed time period. The Group does not hold any collateral as security.

The ageing analysis of trade receivables based on invoice date is as follows:

Unaudited 30 September 2016 *HK$’000* 1 to 30 days 105,432 31 to 60 days – 91 to 180 days 10,442 115,874	Audited 31 March 2016 HK$’000 147,822 56,011 –
	203,833

As at 30 September 2016 and 31 March 2016, there were no retention receivables which were past due.

10 TRADE AND RETENTION PAYABLES

Unaudited 30 September 2016 *HK$’000* Trade payables 64,348 Retention payables 10,892 75,240 The ageing analysis of trade payables based on invoice date is as follows: Unaudited 30 September 2016 *HK$’000* 0 to 30 days 60,105 31 to 60 days 1,989 61 to 90 days 949 91 to 180 days 475 181 to 365 days 830 More than 365 days – 64,348	Audited 31 March 2016 HK$’000 74,955 12,352
	87,307

	Audited 31 March 2016 HK$’000 67,645 510 – 6,524 89 187
	74,955

MANAGEMENT DISCUSSION AND ANALYSIS

BUSINESS REVIEW AND OUTLOOK

Group Revenue and Profit

The Group’s revenue and profit for the Period decreased 11% and 70% to HK$479 million and HK$31 million, respectively (2015: HK$540 million and HK$104 million, respectively). The decrease was mainly due to a drop in contract revenue and decline in the overall profit margin of the projects undertaken by the Group as compared with those projects in the Previous Period.

The gross profit margin for the Period was 12% (2015: 23%). As disclosed in the annual results and annual report of the Group published for the year ended 31 March 2016 (the “Annual Report”), despite the relatively large contract size of the Hospital Expansion project, more than half of the contract value was related to non-bored pile works, which were subcontracted out and the margin of these subcontracting works was relatively low. Besides, the Group was unable to secure a new contract over the past twelve months which affected the utilisation of the foundation equipment and workforce that had been returned from Macau to Hong Kong after the completion of the Composite Development Project at the end of 2015. In addition, the overall profit of the Group was further suppressed by the overhead costs related to equipment depreciation and labour.

Major Projects during the Period

Major Projects during the Period
	As at
	30 September		Estimated
	2016	Expected	Remaining
	Completion	Completion	Contract
	Status	Date	Value
			(HK$)
			(Note)
Proposed Commercial/Residential	Around 30%	2017/18	95 million
Development in Wong Tai Sin District
Liantang/Heung Yuen Wai	Around 95%	2016/17	25 million
Boundary Control Point
Hospital Expansion	Around 20%	2019	1,150 million

Note: The above remaining contract values were determined with reference to internal estimates based on the currently available information, and may be subsequently revised.

Proposed Commercial/Residential Development in Wong Tai Sin District

As mentioned in the Annual Report, certain technical complications in the first phase of the project had required the employer to re-design and re-schedule part of the works. As a result, there was only minimal amount of contract works carried out during the Period. The remaining two-thirds of the works is expected to be completed by the end of 2017.

Liantang/Heung Yuen Wai Boundary Control Point

A substantial portion of this project has been completed during the Period. This project has contributed about 66% of the Group’s revenue in the Period. According to the latest works programme, the remaining small portion of this project requires another half year or more to be completed which will be around the end of this financial year. As mentioned in the Annual Report, subsequent changes have been made to the design plans while the Group had already started working on the construction sites. Based on the updated information available, the value of this contract is expected to increase to about HK$500 million.

Hospital Expansion

This project contributed about 32% of the Group’s revenue during the Period. The works carried out during the Period comprised primarily the preparatory work of the project and demolition of existing buildings. While the bore piling works are to commence in the second half of this financial year, the Group’s has planned and mobilised its labour force and equipment at the construction site accordingly.

Business Outlook and Recent Development

As discussed in the Annual Report, the delays in funding approval of public works and infrastructure projects caused by filibusters in Hong Kong’s Legislative Council have contributed towards intense price competition for tenders in the construction market. Furthermore, the number of tenders available for the Group to compete for has been limited. The management is mindful of the market conditions going forward and is considering to scale-down its workforce if the outlook and timetable for the launch of those major commercial and public infrastructure projects in the pipeline as discussed in the Annual Report remain uncertain in the near future.

The Group is actively exploring options to diversify its income stream to compensate the impact associated with the downturn in public and large-scale construction tenders pipeline. The Group is evaluating opportunities in the property investment or property development sector. This enables the Group to broaden its business spectrum and source of profits. On the other hand, the Group can leverage its expertise, skills and experience to participate in the construction works in those investment projects which would help improve its revenue and profits as a contractor as well.

Memorandum of Understanding in respect of Possible Investment and Connected Transaction

Subsequent to the end of the Period, a wholly-owned subsidiary of the Company named Sam Woo Asia Development Group Limited, entered into a memorandum of understanding (the “MOU”) with Gold Champion Enterprises Limited (“Gold Champion”) on 20 October 2016, with a view to explore co-operation for the development of certain land parcels in Hong Kong held by subsidiaries of Gold Champion (the “Possible Transaction”). The co-operation may include but would not be limited to investment by the Company in Ga Fun Holdings Limited (together with its subsidiaries, “Ga Fun Group”), a subsidiary of Gold Champion.

As at the date of the MOU, Ga Fun Group owned residential and industrial land parcels in Hong Kong with an aggregate land area of about 15,000 square metres. Each of Gold Champion and Ga Fun Group is wholly-owned by Mr. Lau Chun Ming, the chairman and an executive director of the Company. The MOU has allowed 180 days for the Group to conduct due diligence, including a feasibility study on land development, and to negotiate and enter into a definitive and binding agreement in relation to the Possible Transaction.

So far as the Company understands from Gold Champion, Ga Fun Group owns two land parcels in Yuen Long in the Residential (Group D) and Residential (Group E) land zone categories (the “Residential Lands”), respectively, and one land parcel in Fanling in the Industrial (Group D) land zone category (the “Industrial Land”). The total area of the Residential Lands was about 13,500 square metres and that of the Industrial Land was about 1,700 square metres. Through the due diligence exercise, the Company also intends to evaluate the potential value of development on these land parcels and assess the relevant investment costs. The Company wishes to explore viable property development projects whereby it can participate as a developer in residential and commercial properties.

As at the date of this announcement, no binding agreement had been entered into in relation to the above. For details of the MOU, please refer to the Company’s announcement dated 20 October 2016.

FINANCIAL REVIEW AND ANALYSIS

Despite the decrease in revenue and profit for the Period as discussed above, the Group’s financial position remains healthy. The current ratio was 1.6 times (31 March 2016: 1.7 times) which has remained stable and the total cash and bank balance was approximately HK$411 million (31 March 2016: HK$221 million). The net gearing was 0% (31 March 2016: 13%) as the Group had a net cash position as at 30 September 2016. The Group has also maintained a stable dividend payout ratio which was about 27% for the Period.

Administrative Expenses

Administrative expenses increased 38% from approximately HK$15 million to approximately HK$21 million. As certain litigations were concluded and the related costs and provision were recovered and written back during the Previous Period, that effect had set off partly the administrative expenses in the Previous Period. If legal and professional fees were excluded in both periods, the administrative expenses would have increased for about 16% mainly due to the increase in salaries expenses and operating lease rental in respect of storage premises.

Finance Cost

Finance cost for the Period was approximately HK$5.2 million, representing a decrease of approximately 9% compared with approximately HK$5.7 million in the Previous Period. This is mainly attributable to the reduction in short-term bank loans while the Group has sufficient working capital generated internally to meet the needs of the current construction projects.

Taxation

The effective tax rate of the income tax expense for the period is 8% (2015: 3%). Unlike the Previous Period, about 99% of the construction revenue in the Period was generated from Hong Kong projects whereas the assessable profit is subject to 16.5% tax rate in Hong Kong. The lower effective tax rate in the Previous Period was resulted mainly because (i) about 93% of the construction revenue was generated from the Macau project and the statutory tax rate there was lower than in Hong Kong; and (ii) there was rental income earned by subsidiaries in Hong Kong in relation to the leasing of machinery and equipment for use in Macau projects which was regarded as offshore income and therefore not subjected to taxation in Hong Kong and Macau.

Profit and Net Profit Margin

As a result, the Group’s profit after tax was approximately HK$31 million (2015: HK$104 million), representing a year-on-year decrease of approximately 70%. Net profit margin was 6% (2015: 19%).

Capital Expenditures and Capital Commitments

The Group generally finances its capital expenditures by internally-generated resources, long-term bank loans and finance leases. Upon our listing, the capital contribution from the Company’s shareholders became an additional source of finance. During the Period, the Group invested approximately HK$8 million in the expansion of its machinery and equipment and placed certain purchase orders for machinery and equipment in response to the anticipated project needs in future. As at 30 September 2016, the Group’s capital commitments relating to the purchase of machinery and equipment was approximately HK$43 million (31 March 2016: HK$4 million).

During the Period, save as disclosed herein, the Group did not make any material acquisitions or disposals of assets.

Liquidity, Financial Resources and Gearing

Liquidity

The Group generally meets its working capital requirements by cash flows generated from its operations and short-term borrowings. During the Period, the Group generated from operating activities a net cash inflow of approximately HK$233 million, which was more than that in the Previous Period (2015: HK$68 million). This was mainly because the trade receivables of about HK$193 million outstanding at 31 March 2016 were collected during the Period. Together with short-term bank loans and overdrafts facilities available, the Group has been financially sound in its daily operations throughout the Period.

Use of Proceeds

Among the remaining net proceeds from the IPO in the amount of HK$52 million as at 31 March 2016, approximately HK$8 million was applied in acquiring machinery and equipment during the Period in accordance with the intended use. The remaining net proceeds of approximately HK$44 million from the IPO as at 30 September 2016 is intended for financing acquisition of machinery and equipment in the future.

Cash and Bank Balances

As at 30 September 2016, the Group had a total cash and bank balances of approximately HK$411 million (31 March 2016: HK$221 million) mainly denominated in Hong Kong dollars and Macau patacas. The increase in cash and bank balances was mainly due to the net cash generated from operating activities during the Period.

Borrowings

As at 30 September 2016, the Group had total borrowings of approximately HK$253 million (31 March 2016: HK$288 million) denominated in either Hong Kong dollars or Euros. Borrowings generally include short-term and long-term bank loans, finance leases and overdrafts bearing floating interest rates. Of the total borrowings, approximately HK$36 million (31 March 2016: HK$36 million) were short-term bank loans and bank overdrafts and approximately HK$105 million (31 March 2016: HK$118 million) was the current portion of long-term bank loans and obligations under finance lease with maturity dates within 12 months. This analysis excludes those long term borrowings with an immediate demand clause that were classified under current liabilities.

Gearing Ratio and Total Equity

As at 30 September 2016, the Group’s net gearing ratio (net borrowings divided by total equity) was 0% (31 March 2016: 13%) as the Group had a net cash position. The Group’s net cash position was mainly attributable to the profits from operations and the reduction in capital expenditure for machinery and equipment. For the purpose of calculating the Group’s net gearing ratio, the net borrowings refer to the total borrowings less cash and cash equivalents, short-term bank deposits and restricted bank balances pledged as the security for credit facilities of the Group.

As at 30 September 2016, the Group’s net current assets were approximately HK$224 million (31 March 2016: HK$232 million) and current ratio (current assets divided by current liabilities) was 1.6 times (31 March 2016: 1.7 times). The Group’s total equity as at 30 September 2016 was approximately HK$656 million (31 March 2016: HK$655 million).

Foreign Exchange Exposure

Operations of the Group are mainly conducted in Hong Kong dollars and Macau patacas. Its revenue, expenses, cash and bank balances, borrowings, other monetary assets and liabilities are principally denominated in those two currencies. Apart from the purchase orders for machinery and equipment paid in Euros and Singapore dollars and such short-term Euros borrowings for settlement, the Group was not exposed to any significant foreign currency risk nor had it employed any financial instrument for hedging.

Contingent Liabilities

As at 30 September 2016, save for guarantees of performance bonds relating to two foundation works and ancillary services projects of the Group of approximately HK$18 million and HK$17 million, respectively (31 March 2016: same), the Group did not have any material contingent liabilities. The performance bonds are expected to be released in accordance with the terms of the respective construction contracts.

Pledge of Assets

As at 30 September 2016, the net book amount of plant and equipment held under finance leases and pledged for long term bank loans amounted to approximately HK$207 million (31 March 2016: HK$210 million) and approximately HK$174 million (31 March 2016: HK$139 million), respectively. None of the banking facilities of the Group were secured by the Group’s bank deposits (31 March 2016: none).

HUMAN RESOURCES

As at 30 September 2016, the Group had around 259 employees. The remuneration package we offer to our employees includes salary, discretionary bonuses and allowances. In general, we determine employee salaries based on the individual’s qualifications, position and performance (where applicable).

INTERIM DIVIDEND AND CLOSURE OF REGISTER OF MEMBERS

The Board of Directors declared an interim dividend of HK0.5 cent per share, amounting to HK$8.4 million, representing a dividend ratio of approximately 27%. These interim dividends are payable to shareholders whose names appear on the register of members of the Company as at the close of business on 13 December 2016. It is expected that interim dividend will be paid on or about 30 December 2016.

In order to establish entitlements to the interim dividend, the register of members of the Company will be closed on Tuesday, 13 December 2016, on which no transfer of share of the Company will be registered. All transfers of shares of the Company accompanied by the relevant share certificates and properly completed transfer forms must be lodged with the branch share registrar and transfer office of the Company in Hong Kong, Tricor Investor Services Limited of Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration no later than 4:30 p.m. on Monday, 12 December 2016.

OTHER INFORMATION

Purchase, Sale or Redemption of Listed Securities

Neither the Company nor any of its subsidiaries had purchased, sold or redeemed any of the Company’s listed securities during the Period.

Corporate Governance

The Company had complied with the Corporate Governance Code as set out in Appendix 14 of the Listing Rules during the Period.

Model Code of Securities Transactions by Directors

All directors confirmed that they complied with the required standards as set out in the Model Code throughout the Period.

Audit Committee

The audit committee, comprising three independent non-executive directors, namely Professor Wong Sue Cheun, Roderick, Mr. Chu Tak Sum and Mr. Ip Tin Chee, Arnold, has reviewed the accounting principles and practice adopted by the Group, and the unaudited consolidated financial statements of the Group for the Period.

Publication of Results Announcement and Interim Report

This announcement is published on the website of the Stock Exchange at www.hkex.com.hk and at the website of the Company at www.samwoo-group.com. The interim report will be despatched to the shareholders of the Company and available on the above websites in due course.

On behalf of the Board of Sam Woo Construction Group Limited Lau Chun Ming Chairman

Hong Kong, 29 November 2016

As at the date of this announcement, the executive directors are Mr. Lau Chun Ming, Mr. Lau Chun Kwok, Mr. Lau Chun Ka and Ms. Leung Lai So; and the independent non-executive directors are Professor Wong Sue Cheun, Roderick, Mr. Chu Tak Sum and Mr. Ip Tin Chee, Arnold.