The board of directors of AKM Industrial Co. Ltd. informed the shareholders of the company and potential investors that, based on the preliminary review on the management accounts of the Group for the year ended 31 December 2015 and the information currently available to the Board, the Group is expected to record a significant decrease in profit for year 2015 as compared with that reported for the year ended 31 December 2014, which may or may not result in a loss for Year 2015. Such decrease in profit for Year 2015 was mainly attributable to: Phase II of Suzhou Factory of the Group in the People's Republic of China commenced trial production of flexible packaging substrates in the first quarter of 2015.

As the operation of such new product is still at the initial stage, the time required for obtaining certification as qualified supplier for new clients is longer than expected, product acceptance rate grows at a slower pace, the drop in profit margin is relatively huge and benefit of economy of scale has not yet been achieved, thus incurring higher operating costs; the significant increase in research and development expenses incurred for the development of new products and new production techniques, as well as the testing and trial production of the flexible packaging substrates in Phase II of Suzhou Factory; the decrease in average selling price of the major products of the Group due to changing market conditions, resulting decrease in profit margin.