Realord Group Holdings Limited (“Realord” or the “Company,” together with its subsidiaries collectively known as the “Group,” stock code: 1196.HK) is pleased to announce its unaudited interim results for the six months ended 30 June 2016 (the “Period”). The Group’s results achieved turnaround from loss of approximately HK$9.9 million for the last corresponding period to profit of approximately HK$81.7 million for the Period.

2016 Interim Results

*During the period, as a result of the completion of the acquisition of the properties situated at Qiankeng Industrial Zone, Fumin Community, Guanlan Town, Baoan District, Shenzhen, the PRC, figures for the last corresponding period were restated. accordingly.

During the Period, the Group recorded a turnover of approximately HK$92.8 million, representing an increase by 20.1% year-on-year (“YoY”). The increase in the turnover of the Group was primarily due to the increase in the turnover from the motor vehicle parts segment, the financial services segment and property investment segment.

Gross profit margin of the Group increased from approximately 41.3% for the last corresponding period to approximately 44.9%, which was due to the increase in revenue from the financial services segment and property investment segment, which comprised service income, margin interest income and rental income. During the period, the results achieved turnaround from loss to profit, and recorded approximately HK$81.7 million of profit. The profit per share was HK7.08 cents.

The increase in profit attributable to the equity holders was mainly due to the fair value gain on investment properties amounted to approximately HK$176 million, which was partly offset by the related deferred taxation of the fair value gain of approximately HK$84.9 million and also the increase in corporate expenses.

Business review

During the Period, the motor vehicle parts segment recorded a revenue of approximately HK$38.8 million, representing 41.8% of the total revenue of the Group. The segment revenue noted a significant increase by 73.2% YoY. The profit from this segment wasapproximately HK$0.9 million in the last corresponding period, and reached HK$1.7 million during the period.

During the period, the commercial printing segment recorded a revenue of approximately HK$38.4 million, representing 41.4% of the total revenue of the Group. There was a slight increase in segment revenue of 3.6% as compared to that in the last corresponding period.

In terms of the Property Investment Segment, in June 2016, the Group completed the acquisition of the properties situated at Qiankeng Industrial Zone, Fumin Community, Guanlan Town, Baoan District, Shenzhen, the PRC, which is a paramount step of the Group to evolve the real estate development business. The Property Investment Segment recorded a revenue of approximately HK$5.9 million during the period, representing 5.9% of the total revenue of the Group. Due to the increase of fair value gain on investment properties, the profit from this segment increased drastically to approximately HK$179.1 million during the period.

The Financial Service Segment recorded a revenue of approximately HK$5.3 million during the period, representing 5.7% of the total revenue of the Group. Besides, the Group had entered into an agreement with 5 other joint venture parties to set up a JV securities company to carry out securities businesses in the PRC, which can help the Group to expand its securities services business and to enable the Group to exchange its business network and relationship in the PRC, and hence to gain a foothold in the PRC market.

The Hangtag Segment recorded a revenue of approximately HK$4.8 million during the period, representing 5.2% of the total revenue of the Group. The segment revenue remained in similar level as the last corresponding period.

Outlook

The operating environment of the commercial printing and hangtag businesses will continue to be competitive in the coming years. The Group shall strengthen its business development team to achieve sales growth and increase market share. The Group is in the process to set up the PRC operations of motor vehicle parts segment in Guangzhou. We expect that the PRC operations will effectively contribute to the business expansion of the sales and distribution of motor vehicle parts business.

The Group is in the process to develop the financial services business, which would provide financial services including securities brokerage, margin financing, money lending and financial leasing services. With the upcoming launch of the Shenzhen-Hong Kong Stock Connect Scheme, the preferential government policies and the establishment of the joint venture(i.e. “Yuegang Securities Company Ltd”), we believe the Group would sustain a long term growth in the financial services business.

Looking forward, the Group will strike to explore for any potential real estate development or property investment opportunities. For the purpose of sustaining long term growth, we will also keep on exploring all potential opportunity to develop its businesses.

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