Bauhaus International : INSIDE INFORMATION ANNOUNCEMENT

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Bauhaus International (Holdings) Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 483)

INSIDE INFORMATION ANNOUNCEMENT

This announcement is made by Bauhaus International (Holdings) Limited (the "Company", together with its subsidiaries, the "Group") pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions (as defined in the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

The board of directors of the Company (the "Board") announces that in light of the unprecedented difficult operating environment in Hong Kong, particularly the novel coronavirus outbreak, which resulted in significant decline of tourist arrivals and extremely weak local consumer sentiment, the Board decided to close 8 to 10 loss-making retail stores in Hong Kong shortly. As a result of the early termination of the leases of these stores in Hong Kong, the Group is expected to record one-offwrite-off and/or impairment losses amounting to approximately HK$16 million to HK$50 million, subject to the final results of negotiations of surrender of the leases between the Group and the relevant landlords. In addition, pursuant to the respective lease agreements, the Group may be required to compensate for losses or damages to the respective landlords subject to various conditions. As at the date of this announcement, it is not practicable to estimate the related losses or damages as the outcome which could determine the compensation is not wholly within the control of the Group.

It is also expected that a total of approximately 100 employees will be made redundant as a result of the store closings. They will be fully compensated in accordance with applicable employment laws and regulations. Subject to the final results of negotiations with the respective landlords of the stores, the closure and downsizing will result in a loss while it is not expected to have a significant adverse impact on the Group's overall operations and cash flows. As at the date of this announcement, the Group has sufficient cash on hand to meet current business needs.

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In the event that any transaction with applicable percentage ratios as defined in Rule 14.07 of the Listing Rules exceeds 5% after the termination arrangements have been confirmed with the landlords, further announcement(s) will be published.

Shareholders of the Company and potential investors are advised to exercise caution when dealing in the shares of the Company.

By Order of the Board

Bauhaus International (Holdings) Limited

Wong Yui Lam

Chairman

Hong Kong, 20 February 2020

As at the date of this announcement, the board of directors of the Company comprises four executive directors, namely Mr. Wong Yui Lam, Madam Tong She Man, Winnie, Madam Lee Yuk Ming and Mr. Yeung Yat Hang and three independent non-executive directors, namely Mr. Mak Wing Kit, Mr. Chu To Ki and Mr. Mak Siu Yan.

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