The board of directors of Huiyin Household Appliances (Holdings) Co., Ltd. announced that the Group is expected to record a loss for the year ended December 31, 2012 as compared to the net profit for the last year. The change is mainly attributable to the following reasons: the provisions made by the Group, if any, in respect of the amounts due from suppliers after taking into account of increased operation pressure in the upstream industry; the increasing cost pressure in the home appliances industry and the declining home appliances' demand in the market due to the government's macro policy; the impairment loss against intangible assets, if any, because of the fact that the performance of the acquired business, which primarily sells home appliances under brands in Japan, did not meet the expectation after the earthquake in Japan last year and the macro economic crisis in the whole world as well as the political negative impact from Diaoyu Island during the year; and the direct and indirect loss due to the store of the Group in Yangzhou, which is located at Ruifeng Building, No. 248 Wenchang Zhong Road, Yangzhou City, Jiangsu Province, the People's Republic of China, and comprises four stores with an aggregate floor area of 4,100 square meters, being burnt in a fire which broke out on October 25, 2012.