The board of directors of China Sunshine Paper Holdings Company Limited informed the shareholders of the company and potential investors that, based on the preliminary assessment of currently available information, it is expected that the results of the company and its subsidiaries for the six months ended June 30, 2012 may experience a significant decline as compared with those for the corresponding period in 2011. The decline in the results of the group for the six months ended June 30, 2012 is mainly attributable to the decrease in gross profit margins of the products of the group and the increase in finance cost during the period. Based on the preliminary assessment of the management accounts of the group for the six months ended June 30, 2012, a net profit is expected to be recorded for the four months ended June 30, 2012 as compared to a net loss recorded for the months ended January 31, and February 29, 2012.