The board of directors of South China Holdings Company Limited informed the shareholders of the Company and potential investors that, based on the information currently available and the preliminary review of the unaudited consolidated management accounts of the Group for the six months ended 30 June 2023, the Group expects to record a net loss of approximately HKD 85 million for the Period as compared with a net profit of approximately HKD 38 million for the corresponding period in 2022. This is mainly attributable to (i) drop in operating profit from the trade and manufacturing segment as a result of decrease in sales orders received from the major customers during the Period for the major customers adopted prudent ordering strategies after aggressive approach to pull in their respective shipment schedules in the first half of 2022 for avoidance of deadlock in logistics that they suffered in 2021; (ii) increase in finance costs due to increase in the Hong Kong Interbank Offered Rate during the Period as compared to the corresponding period in 2022; and (iii) decrease in gain on disposal of debentures of berths recognised during the Period. The impacts of above outweighed the gain on disposal of subsidiaries of approximately HKD 78 million recognised during the Period.