The board of directors of Lifestyle China Group Limited informed shareholders of the Company and potential investors that based on the preliminary review of the unaudited consolidated management accounts of the Group, the Group is expecting to record a loss of around RMB 70 million for the year ended 31 December 2019 as compared with a profit of RMB 338 million for the year ended December 2018. The expected loss of the Group for the year ended 31 December 2019 is mainly attributable to the share of losses of the associates in Hebei Province, the People's Republic of China, amounting to approximately RMB 295 million (2018: share of profits of RMB 204 million) as a result of the Company's conservative assessment and decision for a full provision to be made against certain trade receivables held by the associates (as compared to a provision representing approximately 4% made in the unaudited consolidated management accounts of the associates made up to 31 December 2019). The Company's full provision decision was made after obtaining an understanding from management of the associates in respect of the actions that have been taken and to be taken to recover the above-mentioned trade receivables. In addition, the Company's decision was made with reference to the Group's knowledge from public sources that the guarantor and ultimate owner of the debtors of the associates is currently being detained by the relevant local authority and that all the companies and assets located in Hebei Province under the direct and indirect control of the guarantor have been seized by the relevant local authority.