Sasbadi Annual Report 2020

Prospects Based on the Economic Outlook 2021 report by the Ministry of Finance, Malaysia’s real gross domestic product (“GDP”) is expected to grow between 6.5% to 7.5% in 2021, after a contraction of 4.5 % in 2020 due to COVID-19 pandemic. The growth will be supported by strong economic fundamentals and a well-diversified economy. However, the favourable outlook hinges on two major factors i.e. the successful containment of the pandemic and sustained recovery of external demand. Private sector expenditure continues to be the primary driver of growth with private investment and consumption growing 6.7% and 7.1%, respectively, after a contraction of 11.7% and 0.7% respectively in 2020. Meanwhile, public sector expenditure is expected to rebound to a positive growth of 6.7% with the continuation of mega projects such as the Mass Rapid Transit 2 (MRT2) and the Pan Borneo Highway. The economy will continue to operate under conditions of full employment with an unemployment rate of 3.5%, while inflation is projected to normalise at 2.5%. The Malaysia 2021 Budget will focus on caring for the people, enabling local businesses and revitalising the economy under the government’s unique 6R Strategy which comprise of six stages i.e. Resolve, Resilience, Restart, Recovery, Revitalise and Reform, to help the nation cope with the COVID-19 pandemic. Notwithstanding the above, we anticipate that the retail market conditions will continue to remain challenging for the financial year ending 31 August 2021. The digital economy in Malaysia is being spurred by the information and communications technology (“ICT”) industry and the prevalent use of ICT by the vertical sectors in Malaysia. As education is one of the sectors with increasing use of digital services, adapting and maximising value from current and future innovations will allow the Group to benefit optimally from communications and multimedia technologies. For the financial year ending 31 August 2021, the Group will continue to allocate more resources to the digital solution segments and remain hopeful that the catalytic effect of the MCO on the digital transformation will help the Group to achieve higher growth. We also hope that the demand for our English upskilling product, Linguaskill by Cambridge Assessment English will continue to pick up as it has been accepted by the MOE in October 2020 as one of the approved English competency tests to assess the readiness of English teachers in Malaysia with the Common European Framework of Reference for Languages (“CEFR”). In August 2020, Linguaskill also received recognition from the Ministry of Higher Learning (“MOHE”), Malaysian Qualifications Agency (“MQA”) and Education Malay- sia Global Services (“EMGS”) as an official English competency test for university admission and benchmarking. Henceforth, Malaysian and international students may take Linguaskill to enrol into private institutions of higher learning in Malaysia. International students may also take Linguaskill for student visa applications via EMGS. Being fully digital and highly functional, Linguaskill would able to meet the diverse demands of the market today. The Group will also launch an e-tuition platform, “Tutor2U”. Through Tutor2U, students in Malaysia will be able to receive on-demand, e-tuition services from teachers across the country, as well as subscribe to an array of learning resources and videos prepared by teachers. The launch of this platform represents the Group’s first step into the gig economy business. The print publishing segment will continue to remain relevant for the next few years due to the prevailing digital divide. We expect the demand for print publishing products to increase when the schools reopen. The Group also hopes to gain a bigger market share by offering a diverse range of educational products that include both the conventional print publishing products and digital education solutions. The Group aims to expand its market share going forward as we expect the market to consolidate further because of the pandemic. This would benefit the Group as it further strengthens its economies of scale. The Group will continue to grow the non-academic print publication segment and hopes to ride on the wave of the 10-year National Reading Decade 2021-2030 programme launched by the Minister of Education with the aim to transform Malaysia into a Reading Nation by 2030. Premised on the above and barring any unforeseen circumstances, the Group is conservatively optimistic about our prospects and performance for the FYE 31 August 2021 despite these challenging times. Dividend Policy The Board of Directors did not recommend any payment of final dividend for the FYE 31 August 2020. MANAGEMENT DISCUSSION AND ANALYSIS 13 ANNUAL REPORT 2020 (continued)