The board of directors of the ST International Holdings Company Limited announced that, based on the preliminary assessment of the latest unaudited consolidated management accounts of the Group for the three months ended 31 March 2022 and the information currently available, the Group is expected to record a loss of approximately HKD 4.5 million, as compared with a profit for the period of approximately HKD 0.9 million for the three months ended 31 March 2021. The Board attributes such turnaround in financial performance principally to the substantial reduction of over 50% in the revenue for first quarter 2022 as compared with that for first quarter 2021 (first quarter 2021: HKD 14.3 million), which thus has resulted in a substantial decrease of over 80% in the gross profit for first quarter 2022 as compared with that for first quarter 2021 (first quarter 2021: HKD 4.7 million). Such a significant drop in revenue could be mainly attributed to the decrease in sales orders from some of major customers during first quarter 2022.

The outbreak of highly transmissible Omicron variant of COVID-19 since late February of 2022 caused significant economic uncertainty in mainland China. The business operations of some of its major customers in Eastern and Northern China were adversely affected by the implementation of various aggressive preventive control measures, which resulted in significant decrease in purchase orders received from these customers during first quarter 2022. For first quarter 2022, there was also an increase in administrative and other expenses of approximately HKD 1.2 million as compared with that for first quarter 2021, mainly caused by (i) increase in depreciation of plant and equipment of HKD 476,000; (ii) increase in legal and professional fee of HK$116,000 due to consultancy fee for IT network system improvement and registration of patents; and (iii) increase in staff welfare of approximately HKD 290,000 due to a change in policy regarding rental charges for government subsidised staff quarters.