The board of directors of Christine International Holdings Limited informed that, according to the information currently available to the Board, including the unaudited management accounts, the operating results of the group for the year ended December 31, 2014 are expected to decrease significantly as compared to that for the year ended December 31, 2013 and a loss would be recorded. The annual results of the group for the year ended December 31, 2014 were primarily affected by the following reasons: decrease in sales revenue generating from stores as a result of the slowdown in domestic economic growth since last year, weak retail sales, fierce competition from diversified players in the baking industry, segmentation of consumer market, decrease in both the number of customers and average consumption per capita in good-neighbor stores of the group; as restricted by the policy of the Chinese government, there is a significant decrease in purchases of moon cakes, prepaid cards and coupons by governmental organizations at all levels and state-owned enterprises. Revenue generated by sales of moon cakes and by redeeming prepaid cards and coupons for products have been greatly affected.

Peak-season sales in the Mid-Autumn Festival are worse than that of last year; in order to improve the operating results in future, the group has carried out a review on loss-making stores in the second half of the year in 2014, and has initiated the store close down plan on non-performing stores in stages, which led to a decrease in sales revenue resulting from the decrease in the number of stores.