Wah Sun Handbags International : OPERATING UPDATE OF THE CAMBODIA PRODUCTION FACILITY IN VIEW OF THE RECENT DEVELOPMENT OF COVID-19 IN CAMBODIA

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WAH SUN HANDBAGS INTERNATIONAL HOLDINGS LIMITED

華 新 手 袋 國 際 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2683)

OPERATING UPDATE OF THE CAMBODIA PRODUCTION FACILITY

IN VIEW OF THE RECENT DEVELOPMENT OF

COVID-19 IN CAMBODIA

This announcement is made by Wah Sun Handbags International Holdings Limited (the "Company", and 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 purpose of this announcement is to provide the latest operating update of the production facility of the Group in Cambodia (the "Cambodia Production Facility") in view of the recent development of the outbreak of the coronavirus disease COVID-19 (the "COVID-19") in Cambodia.

According to the report of Le Bureau de Prospective Economique of Senegal on the COVID-19 Severity Index, Cambodia was ranked No. 1 in Asia and No. 3 in the world (out of 166 countries) with the best effective measures to contain the spread of COVID-19 and to handle the pandemic's fallout (Source: Jian Hua Daily, 20 November 2020). Nevertheless, the number of new confirmed COVID-19 cases in Cambodia has been rising since April 2021 and the Cambodian government has imposed lockdown measures in its capital city, Phnom Penh, currently effective up to and including 19 May 2021. Starting from 29 April 2021, lockdown areas have been designated as "Red Zones," "Dark Yellow Zones," or "Yellow Zones" (the "Lockdown Area"). As the Cambodia Production Facility is not located within the Lockdown Area, it was not subject to the lockdown measures imposed by the Cambodian government and the directors of the Company (the "Directors") are of the view that its operations have continued without any material disruption.

Since the outbreak of COVID-19, the Company has acted responsibly and undertook the necessary precautionary and preventive measures across its production facilities, both in Cambodia and in China, in the fight against COVID-19. In particular, all employees and visitors of the Cambodia Production Facility and the factory in China are mandated to wear masks and required to have their body temperatures checked prior to entry. Frequent scheduled disinfection is carried out for all public areas within the Cambodia Production Facility and the factory in China and guidelines for practicing social distancing are also in place to ensure reasonable distancing for its employees and visitors of the Cambodia Production Facility and the factory in China.

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However, since this week, some of the Group's employees at the Cambodia Production Facility have been diagnosed as infected with COVID-19 and there were a total of 21 confirmed cases up to and including 14 May 2021 with no reported cases reported at the factory in China. In response to the detection of the COVID-19 cases in the Cambodia Production Facility as reported by the Cambodian Ministry of Health and following discussions with the relevant department of the Cambodian government, the Company will responsibly and swiftly suspend the operations of the Cambodia Production Facility for a period of 14 days from 15 to 28 May 2021 (the "Temporary Suspension") to conduct a detailed review of the current precautionary and preventive measures in place with the view to strengthening such measures as deemed appropriate while performing thorough deep-cleaning at the Cambodia Production Facility to further protect all of its employees. In addition, testing of COVID-19 has also been conducted with 14 days quarantine for those employees who were closely working with the confirmed cases.

Directors expect that the Temporary Suspension may result in a delay in implementing the Group's original planned production schedule and the delivery of its products to its customers in the first half of this year, which may have an adverse impact on the Group's operations and financial performance. Under such special circumstances, the Group is currently working closely with its suppliers to reschedule the delivery of raw materials and liaising with its customers to adjust the delivery schedules so as to minimise any negative economic impact the Temporary Suspension may have on the Group, its suppliers and its customers. The Group has informed its customers regarding the possible delay in the scheduled fulfilment of orders, and such possibly delay has been accepted and agreed by the customers concerned without penalty for late fulfillment of orders.

Revenue generated by sales of products manufactured in Cambodia contributed approximately 93.6% of the revenue of the Group for the six months ended 30 September 2020. As such, the Group will endeavour to re-allocate part of the production orders from the Cambodian Production Facility to its factory in China to mitigate the potential impact which the Temporary Suspension may bring to the Group and its customers.

To the best knowledge of the Directors and based on the information currently available to the Group, the Temporary Suspension is not expected to have any material impact on the Group's overall financial position. The Group is committed to protecting the health and safety of its employees and will continue to fully comply with the COVID-19 outbreak containment measures imposed by the Cambodian government and that of the Chinese government so as to ensure a safe working environment under which our employees operate. The Company will continuously monitor the situation and assess the impact of the COVID-19 outbreak on the operations of the Group going forward and will make further announcement(s) to update the shareholders of the Company (the "Shareholders") as and when appropriate.

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

For and on behalf of

Wah Sun Handbags International Holdings Limited

Ma Hing Man

Chairman and Executive Director

Hong Kong, 14 May 2021

As at the date of this announcement, the executive Directors are Mr. Ma Hing Man (Chairman), Mr. Ma Hing Ming (Chief Executive Officer), Ms. Ma Lan Chu, Mr. Ma Yum Chee and Ms. Ma Lan Heung; and the independent non-executive Directors are Mr. Lam Kwok Cheong, Mr. Wong Wai Keung Frederick and Mr. Yeung Chi Wai.

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