Auto Italia Holdings Limited provided earnings guidance for the year ended December 31, 2012. The board of directors of the company informed that, based on the unaudited management accounts of the Group, the Group is expected to record a substantial increase in loss for the year ended December 31, 2012 as compared to last year. The anticipated substantial increase in loss is mainly attributable to (i) the unsatisfactory performance of the car and fashion businesses in mainland China due to the sluggish local consumption and critical retail market situation; and (ii) the impairment of certain assets, including but not limited to, goodwill, available-for-sale financial assets and other receivables.

The impairment loss is expected to be substantial but the Board would like to emphasize that such non-recurring impairment has no material effect on the cash flow of the Group's operations.