PPS International (Holdings) Limited provided earnings guidance for the year ended June 30, 2016. For the period, the board of the company expects that the Group will record a net loss of approximately HKD 51.2 million for the year ended 30 June 2016 as compared to the net loss of approximately HKD 27.2 million for the year ended 30 June 2015. The Board believes that the net loss for the year ended 30 June 2016 was primarily attributable to the following reasons, including, amongst others: the decrease in the gross profit generated from environmental and cleaning business in Hong Kong by approximately HKD 3.2 million from approximately HKD 22.7 million for the year ended 30 June 2015 to approximately HKD 19.5 million for the year ended 30 June 2016 as a result of (a) the inflation in the direct labour costs and sub-contracting fees; and (b) the deterioration of the profit margin ratio of some contracts secured due to fierce market competition; the net loss of approximately HKD 4.4 million from the auto beauty services business for the year ended 30 June 2016; the increase in the administrative and operating expenses by approximately HKD 9.5 million from approximately HKD 13.1 million for the year ended 30 June 2015 to approximately HKD 22.6 million for the year ended 30 June 2016 due to business expansion of the Group; the compensation of approximately HKD 2.6 million for the early termination of the services contracts; and the provision for claims of approximately HKD 2.9 million from the employees relating to their personal injuries.

The company expects net loss for the year ended 30 June 2016 was primarily attributable to the following reasons: the impairment loss on the goodwill and intangible assets for the auto beauty business of approximately HKD 1.5 million.