'When the average price jumped to $2.1 million last year, it looked great, but it was not a healthy improvement,' he says. 'The money is not the most important factor - OK, it would be nice if we would break even, but we don't want to have more. The sale is part of our overall policy of getting higher-quality horses to race in Hong Kong and, if the main condition is that we get the right quality, it doesn't matter if we lose some money because we will benefit in the long term. Better horses equals better turnover and better sport, and that's what we're looking for.'

Engelbrecht-Bresges also points out that the Club is selling to its own members, which weakens the profit motive attached to other commercial thoroughbred auctions. 'Even if we subsidise the sale, it is our members we are providing horses for, so this is money spent for our core business,' he says.

'We think the quality of our racing comes first, especially in the long term. We had the feeling last year that it was too much money and that's one of the reasons why we expanded the number of horses this year. We wanted to buy in different price ranges to give the owners who don't want to spend more than $1 million the option to buy a horse for maybe $400,000 or $600,000.

'Personally. I expect a price range from $400,000 up to $3.5 million and an average of around $1.4 million. That would put us a little bit under break even, but we're not too worried.'

Even so, there will be plenty of eyes watching the bottom line at an auction which has not always been popular, at least with some trainers who felt the Club was stepping on their turf, and has not produced too many outstanding horses. The exception is Billion Win, who emerged from the first sale in 1996, and while there have been other successes, such as 1999 graduate Lucky Six, there have been plenty of big-price flops. Only six of those 23 high-priced lots from last year have managed to win so far.

It is estimated to cost around $1 million just to put the show on in the sale's highly original venue and the Club's investment has soared this year with the growth of the catalogue. The decision to expand the sale was not based on last year's results, though, with more than half of this year's catalogue having been purchased by the Club before the 2000 sale. The original target was to offer 45, but dropouts have reduced that to 39, with a slight tilt towards the southern hemisphere, and Engelbrecht-Bresges feels confident the results on the racetrack will justify the growth.

'I'm convinced we have a better balance this year and that the overall quality is better,' he says. 'With the expansion to 39, we increased the budget and widened the net and I'm confident this year the quality is probably the best we've had. Buying horses is not a certainty and it is sometimes a numbers game, but with 39 horses you have a better chance of finding some top horses. And probably this sale will provide the best value for money because we expect the average to be lower and the money will be spread around.'

Danehill, as ever, is the strongest influence in the catalogue with nine lots. As the sire of Fairy King Prawn and Hong Kong Sprint hope King Of Danes among others, he remains the most sought-after stallion in Hong Kong and also has three of the top four racecourse earners from last year's sale in Green Century, Lucky Superstar and Companion.

Danehill fits the Club's key purchase criteria, though Engelbrecht-Bresges admits the stallion's success across both the northern and southern hemisphere breeding seasons is making his progeny increasingly difficult to buy at the right price. 'I personally think the two best horses in the catalogue are by Danehill, lot seven and lot 29,' he says. 'But I think we will be forced to look elsewhere in the longer term because the price of Danehills will become too expensive. We have certain criteria regarding pedigrees and we do a lot of research. Temperament is a major consideration.

'We look more for proven sires and because the bulk of our races are from 1,400 metres to 2,000 metres, the main focus is on horses who will suit that distance. We wanted to have more of a spread, so now we have some with sprint pedigrees and one horse in particular, lot 36, who should be suited by 2,000 metres up to 2,400 metres. People can then choose according to their own preference and price range.'

The Club had also wanted to include up to five privately purchased racehorses but, like many Hong Kong owners, it found purchases impossible to make within its budget and the Club was also aware of crowding an already small market for the available horses. 'We didn't want to get into direct competition with trainers. With the yearling sales, that is not such a big issue, but there are fewer PPs on the market,' Engelbrecht-Bresges says. 'We also thought the prices for PPs were unreasonably high, probably because people thought the Hong Kong Jockey Club would pay any price. By not buying anything, we wanted to send a signal that we are in the market but only at reasonable prices. We didn't have to buy, so in the end we stayed away.'

The Club has also attempted to use its market power to gain a larger degree of buyer protection from yearling vendors and sales companies by insisting on pre- and post-sale veterinary checks and reserving the right to return horses it has bought if they are found to have a serious fault.

'Most won't sign up to it, especially in the southern hemisphere. Europe is changing fast, but vendors in Australia and New Zealand are very loath to have any sort of pre-agreement,' explains Simon Cooper, the Club's international racing manager. 'Ultimately, what happened was that the vendors who were prepared to stand by their horses were the ones we bought from. We've been good to them - one big Australian stud took a horse back but wanted to treat it as a credit with the condition that we spent that money again on other horses at the next sale. And in the end we spent a lot more.

'On the other side of the coin, we are slightly declaring our hand not only by looking at the horse and having a vet look at it, but also by asking vendors to sign a pre-sale agreement. Overall, we think it's a price worth paying because in the first few years we had several horses worth a serious amount of money who had to go back to their vendors and they all stood by their horses, which says a lot for the breeding industry. But it's only normal ethics catching up with an industry that was behind in terms of buyer protection.

Engelbrecht-Bresges says the Club's efforts safeguard not only the buyers at the International Sale but also other purchases bound for Hong Kong. 'From a customer point of view, it was necessary and I think we have made a lot of changes,' he says. 'There was a lot of resistance, which I can understand, but in the end it is the customer who pays a lot of money and deserves more protection.

'Each year we bring in 260 PPGs, so Hong Kong is a strong market force and the Club's initiative will help the owners and trainers who buy the other 220 which don't go through our sale to get a better deal. Being a breeder myself, I understand it is not easy to make this step and breeders take risks, too, but we are willing to pay a premium for horses who are put through these tests because we don't want a situation where we pay a lot of money and one day after the sale when we X-ray the horse it becomes clear it has no chance of becoming a racehorse. That is not a risk which is fair.'

There are those who slip through the net, most embarrasingly for the Club the quartet from the United States who tested positive for the banned substance Bute upon arrival in Hong Kong for the 1998 sale. And last year a supposed gelding was found to be producing testosterone ahead of the sale because the operation had not been successful. The horse was sold by tender recently after being gelded, while legal action is still ongoing over the original operation.

Once the purchases for the International Sale have been made, the Club then finds itself on the other side of the fence as the vendor and Engelbrecht-Bresges says it is vital to protect the integrity of the sale. 'We have three vetting stages and there is no other sale in the world where horses have been checked so thoroughly,' he says. 'We can say with confidence to our members that we have carried out all our checks with due diligence and provide them with the documentation. It is our members' money and we have to provide the best possible service.'

Cooper adds that the sale has also helped to educate owners about the buying process and the potential pitfalls. 'I think there has been a feeling among some of the permit-holders that it has become very difficult to get a fair horse for a fair price out there on the open market and I've heard some real horror stories. The Jockey Club is being more proactive now and advising owners, and there is a much better exchange of information.

'What has changed over the past five years is the credibility of the sale. The trainers were never very keen on it, and I don't suppose they're that keen on it now, but at least if an owner comes to them and says, 'I'm going to buy a horse at the sale' the trainer will back him and advise him, whereas some trainers in the past have not been helpful.'