Carry Wealth Holdings Limited has planned to further reduce the production scale in Mainland China and downsize the manufacturing facility at Heshan (the "Heshan facility"), and engage overseas subcontractors for manufacturing process, primarily due to lower labour costs and overheads and the change in customers' sourcing strategy. The Heshan facility is held under (Heshan Carry Wealth Garment Limited), a wholly-owned subsidiary of the Company. It has the effect to help reduce costs for the Group in the long run, but the Group will have to incur certain one time restructuring costs for the current financial year.

The above business action has been proposed to and is supported by the Group's major customers. As part of the action plan, upon completion of the existing production orders, the expected shipment dates of which are in May 2024, the Heshan facility will not handle any further production orders of the Group. Production orders originally allocated to the Heshan facility, with original shipment dates after May 2024, will be placed to overseas subcontractors, mainly, the Group's business partnerships with subcontracted factories in Cambodia and Indonesia.

Regarding the headcount in Heshan Carry Wealth Garment Limited, labors directly attributable to the production will be minimised. Office staff including merchandisers and back office will be maintained to support the garment business operation of the Group.