The board of directors Christine International Holdings Limited announced that based on the information currently available to the board, including the unaudited management accounts of the Group, the results of the Group
for the year ended December 31, 2012 are expected to decrease significantly as compared to that for the year ended 31 December 2011. To the best of the director's knowledge, the group's annual results were mainly affected by an increase in expenses at the beginning of the second quarter of 2012 as a result of higher salaries which were paid in compliance with the revised requirements in minimum wages and social security regulations in Jiangsu, Zhejiang and Shanghai in China, in addition, constant increased rentals for old- and newly-opened-stores in various regions boosted sales expenses up. Operating results of the Group's old stores receded and the performance of newly opened stores fell below expectation due to weak domestic consumption and fiercer competition from diversified players in the baking industry, which led to lingeringly weak sales growth of individual stores in 2012 although overall operating income remained basically flat. and increase in sales expenses, including but not limited to salaries for new employees as well as additional costs for rental and reserve packaging materials, for newly opened stores as part of the rapid expansion of the Group's business after the listing of the Group.