The Board of Directors of the Jiahua Stores Holdings Limited announced that potential investors and shareholders of the Company that having assessed currently available information, the unaudited consolidated management accounts of the Group for the six months ended 30 June 2020, the Group is expected to record a net loss of approximately RMB 51,000,000 for the six months ended 30 June 2020, as compared to net profit of approximately RMB 8,009,000 for the six months ended 30 June 2019. It is mainly attributable to net operating loss has been incurred by most of major stores as a result of general decline in local consumption power due to the outbreak of the novel coronavirus pneumonia(COVID-19) pandemic (the "Pandemic") in China since January 2020; The adoption of new Hong Kong Financial Reporting Standard 16 - Leases, which resulted in additional expenses from higher depreciation charge on right-of-use assets and interest expenses on lease liabilities totaling approximately RMB 20,000,000; Due to the infant stage of operation and competitive business environment, there were operating loss from shopping malls operation of approximately RMB 8,000,000; and pursuant to the outbreak of the pandemic and the particular store operating conditions, there were closures of three stores during the period. This resulted in additional loss on disposal of fixed assets and fixed assets written off of approximately RMB 2,400,000 and RMB 21,000,000 respectively. The operation results for the six months ended 30 June 2020 is expected to be worse than that of the same period in last year.