(Hong Kong, 28 August 2014) – Ernest Borel Holdinsg Limited (“Ernest Borel” or the “Group”) (stock code: 1856), one of the best-selling Swiss-made premium watch brands in the PRC, today announced its unaudited interim results for the six months ended 30 June 2014, its first interim results since its listing on the Main Board of The Stock Exchange of Hong Kong Limited (“HKSE”) on 11 July 2014. During the period under review, the Group’s revenue amounted to HK$271.8 million (2013 Interim: HK$285.8 million), primarily due to the delay in the placement of orders as retailers and distributors have generally waited for the launch of new watch models at the end of June 2014. Despite the competitive operating environment, the Group managed to record a rise in gross profit of approximately 1.3% to HK$182.7 million, while gross profit margin likewise rose, climbing from approximately 63.1% to approximately 67.2% for the corresponding period of last year. However, profit attributable to equity holders slipped to HK$13.5 million (2013 Interim: HK$38.2 million) due to a non-recurring listing expense of HK$18.5 million that was recognised during the reporting period. Excluding the above item, net profit was approximately HK$32.0 million. Another factor that negatively impacted on net profit was Renminbi depreciation whereby the Group recognised a foreign exchange loss of HK$6.1 million during the period. The Group’s basic earnings per share were HK$4.8 cents. Business Review Established in Switzerland in 1856 with 158 years heritage, Ernest Borel ranked fourth in the premium watch market and ranked second in the premium couples watch market in the PRC in 20131. The Group is directly involved in a full breadth of operations, spanning from design, production, marketing and sale of mechanical and quartz premium watches. Its product offerings include a total of over 20 different collections of watches, comprising more than 208 models. Ernest Borel has established an extensive distribution network that effectively taps the lucrative PRC, Hong Kong, Macau and Southeast Asia markets. As at 30 June 2014, the Group has a total of 1,019 points of sale (“POS”), which have increased significantly from 969 POS as at 31 December 2013. With respect to the PRC, the Group’s largest market, with over 848 POS in 23 provinces and cities across the country as at 30 June 2014, revenue declined modestly to HK$203.3 million (2013 Interim: HK$223.9 million), accounted for approximately 74.8% of the Group’s total revenue. The decline was principally due to the delay in orders placed by its customers until the launch of new watch models at the end of June 2014. Retailers and distributors have started placing orders soon after the launch, which the sales will be reflected in the second half of 2014. Further optimism can be drawn from the growth of the PRC luxury goods retail market, which is expected to maintain strong growth and become the leading luxury goods market in the world, with the retail sales value of the premium watch market in the PRC projected to increase at a CAGR of approximately 20% from 2013 to 2018. Ernest Borel is positioned for capturing the immense growth potential and the management will remain fully committed to sustaining the growth momentum, and will prudently increase the number of POS in the country as opportunities arise. Turning to business in Hong Kong, Macau and Southeast Asia markets, thanks to the Group’s effective branding and marketing strategies, revenue from this business segment has steadily risen from HK$57.8 million to HK$64.4 million. As at the end of the reporting period, the Group has 150 POS in these markets, compared to 135 POS as at 31 December 2013. Prospects Looking ahead, the Group will continue to strengthen its position as the leader in the Swiss-made premium couple watch market and an attractive global brand. To fuel for sustainable growth, the Group will seek to bolster its presence in the PRC through expanding its distribution network. To better tap into the robust premium watch market in the PRC, the Group has aimed to increase an aggregate of 300 POS across the country within the next three years commencing from 1 January 2014. Not ignoring the importance of the markets outside the PRC, an aggregate of 100 POS will be established outside the PRC at the same time. Up until 30 June 2014, the Group increased 31 POS in the PRC and 15 POS outside the PRC. Ernest Borel also intends to further reinforce its brand recognition and implement marketing initiatives and conducting promotional activities where the POS are located, so as to further reach out to its current and potential customers. In addition, the management is fully aware of the importance of improving the profit margin and profitability. The Group will increase its design and production capabilities, as well as place a greater effort towards the sales of high-end and mid-to-high-end timepieces. To cope with the increasing demand of premium watches, Ernest Borel plans to construct additional production facilities on the land parcel adjacent to its existing production facility in Le Noirmont, Switzerland. The Group will also expand the Production Department. Ernest Borel will introduce a new range of timepieces during the second half year that will further enhance the product mix. Mr. David Su, Chairman and Executive Director of Ernest Borel, said, “With our successful listing on the Main Board of the Hong Kong Stock Exchange this year, Ernest Borel’s capital base is further enhanced, and our brand is also strengthened. Moving forward, we will continue to leverage Ernest Borel’s well-recognized global brand image and our vertically integrated business model to enjoy numerous competitive advantages. Underpinned by a long history of producing premium Swiss-made timepieces and a name synonymous with quality and craftsmanship, Ernest Borel is well positioned to become one of the best selling brands in the premium watch market in the PRC, leading to stable and long-term returns to its shareholders.” Remark 1: According to the Frost & Sullivan report, Ernest Borel ranked second in the premium couples watch market and ranked fourth in the premium watch market in the PRC in terms of total retail sales value and total retail sales volume in 2013.