EVA Precision Industrial Holdings Ltd. provided earnings guidance for the year ended December 31, 2012. The company also announced that the group recorded a significant decrease in net profit for the six months ended June 30, 2012 as compared to that for the same period of last year. The Board reported to shareholders and potential investors of the company that the factors causing such profit reduction continued to exist in the second half of 2012, and therefore, based on the preliminary review of the management accounts of the group for the period from January 2012 to November 2012 and other relevant financial information relating to December 2012, it is expected that the group continued to record a significant decrease in net profit for the year ended 31 December 2012 as compared to that for the year ended 31 December 2011.

The reduction in profit was mainly caused by the following factors: as disclosed in the section headed significant events and development in the company's 2012 interim report, the group's customers in the office automation equipment sector increased the production volume of relatively low end products for sales to emerging countries with a view to achieving business growth, which altered the type of orders received by the group for the year ended 31 December 2012 and adversely affected the profit margin; as disclosed in the same section in the company's 2012 interim report, the group had been in the process of establishing a new production base in Wuhan for automobile component business. Initial costs were incurred for developing technologies in automobile component production and hiring additional employees in preparation for the launch of production of the new Wuhan production base which is scheduled in mid-2013 and a general increase in other labor and operating costs in the manufacturing industry, which was also disclosed in the same section in the company's 2012 interim report.