The Sincere Company Limited (0244.HK, "Sincere" or the "Company") is pleased to present the unaudited condensed consolidated results of the Company for the six months ending on August 31, 2021. Thanks to the effective and continuous measures implemented by the management to control operating costs and reduce capital expenditures, in order to improve the Company’s operating performance and alleviate its liquidity risk. In the 1H2021, Sincere recorded comprehensive income of approximately HK$80.2 million and gross profit of approximately HK$40.6 million with an increase of 11.4% year-on-year; the company’s unaudited loss attributable to equity holders was approximately HK$60.6 million, compared with last year during the same period, with a decreased of 15.8%, while the net asset increased to approximately HK$91.9 million with 223.6% year-on-year.

During the period under review, the Group’s performance became stable with the number of confirmed cases for the COVID-19 maintained at a relatively low level. The department store operations continued to record revenue of HK$79.6 million, represented a drop by only 2.1% against the same period of last year. Together with the Group’s pro-active measures to reduce operating expenses and the rental concession obtained from landlords, the overall segment loss has been reduced to HK$47.5 million, decreased by 2.8% as compared to same period of last year. To maintain a healthy inventory level, continuing the clearance of previous season inventory is our major goal in this period. The inventory level further reduced from HK$42.9 million as at 28 February 2021 to HK$36.7 million as at 31 August 2021. As a result, provision for inventories decreased from HK$4.2 million in the same period last year to nil in current period.

Despite the surge of a new wave of COVID-19 cases driven by the hyper-contagious Delta variant globally, the confirmed cases for the COVID-19 in Hong Kong continued to maintain at a relatively low level. The foot traffic for our stores continues to recover. The management is of the view that the department store operations would continue to be challenging with the new norm that COVID-19 would not die out in short run unless
most people get vaccination. The Group will take a cautious approach in its business planning to weather the current unfavourable environment. With the support of Realord as the new controlling shareholder of the Company during the period, the Group will carefully deploy its business plans in order to overcome the current adversity.

Founded in 1900, The Sincere Company Limited is one of the Hong Kong’s oldest and most respected retail groups. During 1930s to 1940s, Sincere was reputed as top of the four largest department stores in Shanghai. Currently, The Group has four department stores in Hong Kong located at Central, Mong Kok, Sham Shui Po and Tsuen Wan.

In June 2021, Realord Group Holdings Limited ("Realord Group") (SEHK Stock code: 1196.HK) completed an acquisition of Sincere and officially became the controlling shareholder. In August 2021, Sincere became the designated department store for the Miss Hong Kong Pageant 2021, and co-organized a number of related themed events. Sincere also actively explored new retail models such as e-commerce and live-streaming e-commerce, and successfully held the "A new journey for Sincere’s 100 years", a live-streaming e-commerce event with widespread attention. At the same time, Sincere’s profound experience in department store business and Realord Group’s commercial operations and property development continues to produce synergies. In October, the installation of the Sincere’s signage in Realord Commercial Building in Longhua District, Shenzhen was officially launched marking Sincere’s formal entry into Commercial and retail markets of mainland China again. In the future, Realord Group and Sincere Company will jointly deploy the department store business in Shenzhen and Hong Kong, further extending the business strategy to the Guangdong-Hong Kong-Macao Greater Bay Area. The Group believes that with the support of the Realord Group, the century-old Xianshi store will continue to rejuvenate.