Fairwood : Profit Warning

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

FAIRWOOD HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 52)

PROFIT WARNING

This announcement is made by Fairwood Holdings Limited (the "Company", together with its subsidiaries, collectively known as the "Group") pursuant to Rule 13.09(2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

The board of directors of the Company (the "Board") would like to inform the shareholders of the Company (the "Shareholders") and potential investors that, based on the Board's preliminary assessment of the unaudited consolidated management accounts of the Group for the five months ended 31 August 2019 (the "Period") and the information currently available to the Board, it is expected that the Group may record a significant decline in the profit attributable to the Shareholders for the six months ended 30 September 2019, as compared with the profit for the corresponding period last year. The said decline was mainly attributable to : (1) the impact on adoption of Hong Kong Financial Reporting Standard 16, "Leases" ("HKFRS 16"), which took effect on 1 January 2019 and superseded Hong Kong Accounting Standard 17, "Leases" ("HKAS 17") and (2) the decline in gross profit margin that was mainly due to the rising rental and labor costs.

The adoption of HKFRS 16 will result in higher expenses related to the leases recorded in the Group's statement of profit or loss in the initial years of the lease as compared with such expenses recognized under HKAS 17. The adverse effects on the Group's profit will be off-set in the subsequent years of the lease, and consequently such impact on the Group's profit will be neutralized throughout the individual lease terms.

The Company is still in the process of finalizing the Group's unaudited interim results for the six months ended 30 September 2019. The information contained in this announcement is only based on the preliminary assessment by the Board with reference to the unaudited consolidated management accounts of the Group for the Period and the information currently available to it, which have not been confirmed and reviewed by the auditors of the Company.

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The interim results announcement of the Company for the six months ended 30 September 2019 is expected to be published before 30 November 2019.

Shareholders and potential investors of the Company are cautioned not to unduly rely on such information and are advised to exercise caution when dealing in the securities of the Company.

By Order of the Board

Dennis Lo Hoi Yeung

Executive Chairman

Hong Kong, 9 October 2019

As at the date of this announcement, the Directors of the Company are:

Executive Directors: Mr Dennis Lo Hoi Yeung (Executive Chairman), Mr Chan Chee Shing (Chief Executive Officer), Ms Mak Yee Mei, Ms Peggy Lee and Mr Lo Fai Shing Francis; and Independent Non-executive Directors: Mr Ng Chi Keung, Mr Joseph Chan Kai Nin, Dr Peter Lau Kwok Kuen, Mr Tony Tsoi Tong Hoo and Mr Peter Wan Kam To.

Website: www.fairwoodholdings.com.hk

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