Win Hanverky : BUSINESS UPDATE

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.

Win Hanverky Holdings Limited 永 嘉 集 團 控 股 有 限 公 司

(incorporated in the Cayman Islands with limited liability)

(Stock code: 3322)

BUSINESS UPDATE

This announcement is made by Win Hanverky Holdings Limited (the ''Company'', together with its subsidiaries, the ''Group'') pursuant to Rule 13.09 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 (the ''Board'') of the Company is pleased to provide shareholders and potential investors of the Company an update on the business development of the Group for the six months ended 30 June 2018.

Based on the unaudited consolidated management accounts of the Group for the six months ended 30 June 2018, it is expected that profit attributable to equity holders of the Company would be increased by HK$34 million, from HK$26 million for the same period in 2017 to approximately HK$60 million in 2018.

Manufacturing Business

The Group completed the disposal of the entire equity interest in a wholly-owned subsidiary in the People's Republic of China (the ''PRC''), which owned a piece of land in the PRC, in the first half of 2018. In addition to the deposit of RMB20 million received by the Group in 2017, the Group received the balance payment of RMB158 million from the buyer of the subsidiary in the first half of 2018. A gain (before taxation) on disposal of the subsidiary amounted to approximately HK$124 million was recognised in the income statement. Taking into account such gain on disposal, operating profit of Manufacturing Business would be increased from HK$38 million to approximately HK$83 million.

Revenue from Manufacturing Business decreased by 5% to approximately HK$1,322 million as compared to same period in 2017. The first half of 2018 remained difficult for the sportswear manufacturing business, and recovery is expected to occur in the fourth quarter of 2018. The Sport Field Group, which is newly acquired in February 2018, brought in additional revenue from manufacturing of high-end functional wear and outerwear, which mitigated the drop in revenue from sportswear manufacturing business.

As the revenue drop is expected to be short-term, we have kept our production capacity and labour at a higher level in anticipation of rebounded orders from major customer which is expected to start from the fourth quarter of 2018. As a result, excess costs were inevitably incurred during the six months ended 30 June 2018 which would have resulted in an operating loss of approximately HK$41 million if the gain on disposal of subsidiary mentioned above is excluded.

High-end Fashion Retailing Business

Revenue from High-end Fashion Retailing Business increased by HK$134 million to approximately HK$549 million (30 June 2017: HK$415 million), representing an increment of 32%. The increment mainly came from the expanded retail networks in the PRC, especially for the brands ''Y-3'' and ''Champion''. As at 30 June 2018, the number of offline stores in the PRC has been increased to 100 (30 June 2017: 71 stores)

High-end Fashion Retailing Business generated operating profit of approximately HK$29 million (30 June 2017: HK$28 million), which maintained a similar profit level as the same period of 2017. The performance of certain newly-obtained licensed brands in 2017 was not as strong as ''Y-3'' and ''Champion'' during the six months ended 30 June 2018 and partially offset the profit contribution from other performing brands. The newly-obtained licensed brands are relatively new to the markets and are expected to take time to develop and build up brand awareness.

Sportswear Retailing Business

Facing with the competitive environment of sportswear retail market in Hong Kong, we will not renew lease agreements of our existing stores upon expiry and will not launch any new stores in accordance with our business plan. Revenue from Sportswear Retailing Business continued to drop and decreased by HK$28 million to approximately HK$91 million (30 June 2017: HK$119 million), representing a drop of 24%. Further discounts were offered to customers during the six months ended 30 June 2018 leading to the decreased operating profit margin. During the six months ended 30 June 2018, operating loss was approximately HK$24 million (30 June 2017 : HK$21 million).

The information contained in this announcement is only a preliminary assessment by the management of the Company based on the consolidated management accounts of the Group which have not yet been audited or reviewed by the auditor and audit committee of the Company. The shareholders of the Company and potential investors are advised to refer to the details in the interim results announcement of the Company for the six months ended 30 June 2018, which is expected to be published by the end of August 2018. There may be changes or adjustments following the review of the consolidated management accounts by the auditor and audit committee of the Company.

The shareholders of the Company and potential investors are advised to exercise caution when dealing in the shares of the Company.

By order of the Board

Win Hanverky Holdings Limited

Li Kwok Tung Roy

Chairman

Hong Kong, 9 August 2018

As at the date of this announcement, the Directors are Li Kwok Tung Roy, Lai Ching Ping, Lee Kwok Leung, Wong Chi Keung, Chan Kwong Fai#, Ma Ka Chun#, Kwan Kai Cheong# and Chau Pui Lin#.

#

Independent non-executive Directors