The board of directors of Digital China Holdings Limited announced that based on the Board's preliminary review of the unaudited consolidated management accounts of the Company and its subsidiaries (Group) for the six months ended 30 June 2016, it is expected that the profit attributable to equity holders of the Group for the Period would be in the range of approximately HKD 400 million to HKD 440 million. The profit attributable to equity holders for the Period would include a one-off gain of approximately HKD 500 million realized from the disposal of the traditional distribution business by the Company during the Period and a loss of approximately HKD 120 million to HKD 160 million incurred from the continuing operations during the Period. The above-mentioned one-off gain is calculated according to, amongst others, the net asset value of the Discontinued Operation Business as at the completion of the disposal. The continuing operations are expected to record a loss during the Period as a result of the increase in the expenses incurred from the expansion of the Sm@rt City and the financial services businesses during the Period. With regard to the continuing operations during the Period, the gross profit was increased by approximately HKD 110 million as compared to the corresponding period of 2015, but the expenses/loss were substantially increased as compared to the corresponding period of 2015, mainly due to: the expansion of the Sm@rt City and the financial services businesses incurring an increase of research and development expenses and human resources costs of approximately HKD 113 million; the increase of loan interest rates and the size of loan facilities resulting in an increase of finance costs of approximately HKD 90 million; the decrease of investment income from the invested companies and the dilution of the Company's shareholding in HC International Inc. resulting in a negative impact on profits of approximately HKD 80 million; and the depreciation of Renminbi resulting in an increase of exchange loss of approximately HKD 52 million.