Cosmos Machinery Enterprises Ltd. provides earnings guidance for the six months ended June 30, 2012. For the six months, the company reported that unaudited consolidated financial results of the Group may incur a loss. The board considers that the expected loss was mainly attributable to the drop of
customers' demand and postponements of orders under the persistent economic downturn and uncertainties of global and the PRC markets. As a result, the sales amount in several core businesses of the Group were affected. Furthermore, profit margins were reduced due to the rise in labor cost and fluctuation of raw materials prices. Nevertheless, the board considers that the overall financial position and operations of the Group remain sound and healthy, and remains optimistic to the long term growth and development of the Group.