Xinjiang La Chapelle Fashion : ANNOUNCEMENT IN RELATION TO THE CONTINUED IMPOSITION OF A DELISTING RISK WARNING AND IMPOSITION OF OTHER RISK WARNINGS IN RESPECT OF THE A SHARES LISTED ON THE SHANGHAI STOCK EXCHANGE

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.

新 疆 拉 夏 貝 爾 服 飾 股 份 有 限 公 司

Xinjiang La Chapelle Fashion Co., Ltd.

(formerly known as "Shanghai La Chapelle Fashion Co., Ltd. （上海拉夏貝爾服飾股份有限公司）")

(a joint stock company incorporated in the People's Republic of China with limited liability)

(Stock code: 06116)

ANNOUNCEMENT IN RELATION TO THE CONTINUED IMPOSITION OF

A DELISTING RISK WARNING AND IMPOSITION OF

OTHER RISK WARNINGS IN RESPECT OF THE A SHARES LISTED ON

THE SHANGHAI STOCK EXCHANGE

This announcement is made by Xinjiang La Chapelle Fashion Co., Ltd. (the "Company") 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 in the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

Reference is made to the announcements of the Company dated 21 January 2020, 23 March 2020, 30 March 2020, 29 April 2020, 8 May 2020, 14 May 2020, 22 May 2020, 29 May 2020, 5 June 2020, 12 June 2020, 19 June 2020 and 24 June 2020 in relation to the possible "delisting risk warning" in respect of the A shares of the Company (the "A Shares"), the announcement of the Company dated 30 June 2020 in respect of the imposition of a delisting risk warning in respect of the A Shares from 1 July 2020 and the announcements of the Company dated 29 January 2021, 2 March 2021 and 22 March 2021 in relation to the possible "delisting risk warning" in respect of the A Shares (collectively, the "Announcements"). Capitalised terms used herein shall have the same meanings as defined in the Announcements, unless otherwise specified.

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1. CIRCUMSTANCES FOR THE CONTINUED IMPOSITION OF THE DELISTING RISK WARNING AND IMPOSITION OF OTHER RISK WARNINGS
2. 1. The Company's 2020 internal control audit report was issued with a negative opinion; the Company's major bank accounts have been frozen due to its involvement in litigation cases (as at 31 December 2020, the total number of frozen bank accounts was 92, with an aggregate frozen amount of approximately RMB180 million, representing 88% of the Company's balance of cash at bank); the net profit after deducting non-recurring gains and losses for the three consecutive financial years from 2018 to 2020 was all negative; and the 2020 audit report shows that it is uncertain whether the Company can continue to operate as a going concern,
      triggering Rules 13.9.1(3), (5) and (6) of the Rules Governing the Listing of Shares on the Shanghai Stock Exchange 《( 上海證券交易所股票上市規則》) (revised in December 2020) (the "SSE Listing Rules"). As a result, Company's A Shares may be subject to other risk warnings.
   2. The audited net profit attributable to the shareholders of the Company for the year ended 31 December 2020 was negative, triggering Rule 13.3.2(2) of the SSE Listing Rules respectively. As a result, a delisting risk warning will continue to be imposed on the A Shares of the Company.

1. ABBREVIATION OF TYPE OF SHARES, CODE OF SECURITIES AND DATE OF IMPOSING THE DELISTING RISK WARNING AND OTHER RISK WARNINGS
2. 1. A delisting risk warning was imposed on 1 July 2020 and will continue to be imposed on the A shares of the Company.
   2. Other risk warnings have been imposed on the A Shares of the Company since 30 April 2021.
   3. The abbreviated name for the A Shares will remain as "*ST Laxia"* (*ST 拉夏).
   4. The stock code for the A Shares will remain as "603157".

1. INDICATION ON ISSUES IN RELATION TO THE IMPOSITION OF THE DELISTING RISK WARNING AND OTHER RISK WARNINGS
   On 30 June 2020, the Company issued an announcement titled "Announcement in Relation to the Imposition of Delisting Risk Warning and Trading Suspension in Respect of A Shares Listed on Shanghai Stock Exchange". According to the relevant requirements under Rule 13.2.4 of the Rules Governing the Listing of Shares on the Shanghai Stock Exchange (revised in April 2019), as the audited net profit attributable to the shareholders of the Company for the year ended 31 December 2018 and 31 December 2019 was respectively negative, a delisting risk warning was imposed on the A shares of the Company since 1 July 2020.

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According to the relevant requirements under Rule 13.3.2 of the SSE Listing Rules, the delisting risk warning will continue to be imposed on the A Shares of the Company.

According to the relevant requirements under Rule 13.9.1 of the SSE Listing Rules, the A Shares of the Company may be subject to other risk warnings.

The daily limit in respect of the decrease or increase in the price of the A Shares is still 5%, and the A Shares will continued to be traded on the risk warning board (風險警示板).

IV. OPINION OF THE BOARD OF DIRECTORS OF THE COMPANY AND MAJOR MEASURES FOR REVOKING THE RISK WARNINGS

In order to enhance the Company's sustainable operation and profitability, improve the Company's asset quality, and promote the Company's long-term and healthy development, the Company's board of directors will adopt the following major measures in an attempt to seek the revocation of the delisting risk warning and other risk warnings:

1. The Company will adjust its current business strategy and development direction. On the one hand, the Company will focus on enhancing the management of its high-quality stores, adhere to the policy of "direct store management from the headquarters and management responsibility towards every employee", and strive to improve store efficiency, personnel efficiency and single store profitability. On the other hand, the Company will continue to make efforts in expanding the promotion of its licensing business, and to realize the transition of the Company to a business model featuring light assets, high gross profit and quick turnover. In the fourth quarter of 2020, the Company realized revenue of approximately RMB19.18 million through its online (non-main-brand) licensing business. In the future, the Company will further explore its online licensing business's coverage of brands, categories and platform channels, and utilize the advantages of an "asset-light" business model to improve the asset turnover and profitability of the Company.
2. The Company will "remove its heavy burden and move forward with light gear" as soon as possible. The Company will seek to lease or sell its existing low-efficiency property assets (including park properties at the headquarters and warehousing and logistics assets), and strive to sell them at the maximum premium. Through disposing assets not suitable to its strategy, the Company aims to recover funds to improve its liquidity and asset structure, in order to provide financial support for the development of its core business.
3. The Company will inspect its existing inventories and adopt measures such as identification by style, quality screening, bundling and matching channels, to encourage all regions and partners to facilitate the disposal of the inventories of the Company in accordance with a unified policy, which can effectively reduce the inventory level of old products and accelerate the return of funds to the Company. Meanwhile, the Company will also actively develop new products to enhance its performance and image.

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1. The Company will further adjust and optimize its management system, improve overall budget management and cost control, and strictly adopt measures that "reduce costs and enhance efficiency". In 2021, the Company will attach greater importance to the preparation, control and implementation of its overall budgets, strengthen cost control from the source, strictly control various costs and expenditures, conduct input-output analyses on major costs, perform closed- loop management of key expenses, and conduct dynamic monitoring and process supervision on overall budgets, in order to maximize the profitability of its primary business.
2. Regarding the debt problems faced by the Company at this stage, the Company, being responsible to all shareholders and creditors, will actively negotiate with the relevant courts, creditors and financial institutions to seek a centralized solution to debt settlement, including but not limited to debt extensions, exemptions, discounts, settlements and debt restructuring as soon as possible, in order to alleviate the debt pressure of the Company through unfreezing its major bank accounts and help the Company return to a positive development track. As of the date of this announcement, the Company still has frozen cash at banks in the amount of approximately RMB166 million (nominal value). The Company will propose a feasible plan for debt repayment, in order to combine the benefits of the reduction in operating burden and debt reorganization, thus further optimizing the asset-liability structure of the Company.
3. Apart from taking measures to overcome difficulties, the Company also aims to restore and improve its credit and financing capabilities through actively seeking new investors, obtaining external financing, leveraging the resources and advantages of substantial shareholders in various aspects such as entrusted financing, financial strength, and professional capabilities, optimizing and reorganizing its overall business as well as seeking further funds.

The board of directors of the Company will seriously study the countermeasures to proactively promote and improve various work on the corporate governance of the Company, further optimize the internal control and management mechanism, and urge the management of the Company to adopt and implement various proactive measures, in order that the risk warnings will be revoked.

1. INDICATION ON THE RISK OF POSSIBLE SUSPENSION OR DELISTING OF THE A SHARES
   According to the relevant requirements of the SSE Listing Rules, if the Company still falls under the situation provided by Rule 13.3.12 for the year ending 31 December 2021, the A Shares of the Company will be delisted. Investors are advised to pay attention to investment risks.

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VI. DURING THE PERIOD OF IMPOSITION OF THE DELISTING RISK WARNING, INVESTORS MAY ENQUIRE WITH THE COMPANY THROUGH THE FOLLOWING MEANS:

Contact person: Wu Jinying

Correspondence address: 12F, Building 4, No, 50. Lane 2700 South Lianhua Road, Minhang

	District, Shanghai, China
Postal code:	201108
Contact number:	021-54607196
E-mail:	[e-mail]

Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.

By Order of the Board

Xinjiang La Chapelle Fashion Co., Ltd.

Mr. Wu Jinying

Chairman

Shanghai, the People's Republic of China

29 April 2021

As of the date of this announcement, the executive directors of the Company are Mr. Wu Jinying, Ms. Zhang Ying and Ms. Zhang Danling; the non-executive director of the Company is Mr. Yin Xinzai; the independent non-executive directors of the Company are Mr. Xing Jiangze, Ms. Wong Sze Wing and Mr. Zhu Xiaozhe.

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