New Sparkle Roll International Group Limited provided earnings guidance for the year ended 31 March 2023. Based on the preliminary assessment of the latest unaudited consolidated management accounts of the Group and the financial information currently available, the board of directors of the Company inform the shareholders and potential investors of the Company that the Group is expected to record a loss attributable to owners of the Company of approximately HKD 31 million for the year ended 31 March 2023 as compared with a profit attributable to owners of the Company of approximately HKD 34 million for the year ended 31 March 2022. Such expected loss for the year ended 31 March 2023 was mainly attributable to the following factors: (i) decrease of the revenue and the gross profit of the Group by approximately 7% and 28% respectively, which was mainly due to the adoption of a series of lockdown measures against the 2019 coronavirus epidemic in the mainland China, causing logistics restrictions and reduced foot traffic during the first three quarters of the year ended 31 March 2023, affecting particularly the sales of automobiles.

Even though there was a recovery in term of sales of automobiles in the fourth quarter of the year ended 31 March 2023, gross profit was still under pressure caused by the weak market sentiment and keen competition. The decrease in gross profit was offset by decrease in selling expenses coupled with much less impairment on loan receivables and loan interest receivables as compared with those in the year ended 31 March 2022 as well as decrease in other losses, including much less impairment of goodwill and absence of such written off of other intangible assets in the year ended 31 March 2022, which are in relation to property management business; (ii) increase in the finance costs by approximately 33% for the year ended 31 March 2023 as compared with those in the year ended 31 March 2022 due to the increase in the borrowing to finance the purchases of automobile inventories during the year ended 31 March 2023 and the acquisition of the property used by the Group as showrooms and office in the second half of the year ended 31 March 2022; (iii) impairment of one of film investments and related receivables of approximately HKD 20 million; and (iv) recognition of one-off equity-settled share option expenses for staff in August 2022, such expenses were non-cash nature.