Hop Hing Group Holdings Limited provided earnings guidance for the six months ended June 30, 2014. Based on the information currently available to the board, the group is expecting to record a significant decrease in the consolidated profit from the QSR Business as compared to that for the six months ended June 30, 2013. The expected decline in the consolidated profit from the QSR Business is mainly attributable to, in the first half of 2014, the recovery pace of the Chinese economy was slow and the consumption sentiment in the franchise region remained weak.

Businesses within the retail sector continue to face difficulties under the ‘Three Highs and One Low' operating environment. In response to the difficult environment, the Group has adjusted its operating strategies and consequently the sales performance of the QSR Business has recorded positive growth. However, the additional income and gross profit could not completely offset all of the increasing operating & administrative costs, including labor, rental, utility & advertising costs; to further improve the quality of the company's store network and prepare for the future healthy growth of the company's Group, the management is actively evaluating the performance of the company's existing stores.

Provisions have been made for certain stores that did not meet internal profitability requirements and that would be closed in the near future, and the depreciation of the Renminbi has resulted in a currency exchange loss being recorded by the Group in the period under review.