Meike International Holdings Ltd Comments On FY 2012 Profit Guidance

Meike International Holdings Ltd announced that after a preliminary review on the Group’s unaudited consolidated management accounts for fiscal 2012, the unaudited consolidated net profit is expected to record a substantial loss for fiscal 2012 as compared to that for fiscal 2011. This is mainly due to the following factors; the competition within the sportswear industry in China has continued to intensify since 2011, certain market players have conducted inventory buyback arrangements and resale in deep discount in the market; the Group has reduced the distributors’ volume sales orders for year and further discounts have been given by the Group to its distributors for both footwear and apparels; the number of outlets of our distribution networks has been decreased from 1,859 in December 2011 to 1,197 in December 2012; the reduction in demand from overseas customers; and the repurchased inventories have been resold at 28.21% of the repurchased price.