The board of directors of Kuangchi Science Limited announced that based on the preliminary review and analysis of the latest available unaudited consolidated management accounts of the group, the loss attributable to the owners of the company for the six months period ended June 30, 2015, is expected to increase significantly as compared with that for the same period in 2014. During the interim period, the revenue of the group has increased significantly due to the establishment of the novel space services segment of the group and significant interest income was derived from the fixed deposits placed by the group. However, the increase in revenue and other income were set-off by the significant increase in losses and expenses of the group for the interim period.

The anticipated loss attributable to the owners of the company for the interim period is mainly attributable to (i) significantly drop of the profit margin for the paper business and the expected impairment of the goodwill in relation to the acquisition of the paper business in previous year; (ii) significant increase in administrative expenses including staff costs and relevant share based payment expenses, legal and professional expenses, financial advisory expenses and other operating expenses attributable to the corporate expenses and acquisition activities; (iii) incur of research and development expenses in relation to the novel space services segment of the Group; and (iv) significant increase in finance costs of the group in relation to the borrowings for the payment of the considerations in relation to the acquisitions during the interim period.