Myanmar Strategic : Trading update in relation to COVID-19

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR'). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

22 May 2020

Myanmar Strategic Holdings Ltd.

('MSH' or the 'Company' or the 'Group')

Trading update in relation to COVID-19

Myanmar Strategic Holdings (LSE: SHWE), an independent developer and manager of consumer businesses located in Myanmar, provides an update on the impact of the COVID-19 crisis on the Company following the lockdown measures implemented by the regional administrations and central government of Myanmar.

The health and safety of all guests, customers, team members and business partners is the Company's top priority. All the Group's business units are working directly with the relevant local authorities to ensure that the businesses are vigilant and fully prepared to take additional preventive measures, such as social distancing, as circumstances necessitate.

MSH continues to monitor the situation closely as it evolves. The Board believes that any decline in business is temporary and that significant demand is expected to be released when the situation improves, as Myanmar continues to develop at an impressive pace.

Group Update

The Group is due to publish its interim financial update by the end of June 2020. The preliminary review, based on unaudited numbers, indicates that underlying revenues and Group revenues may exceed US$8.3 million and US$5.3 million, respectively, for the 12-month period ended 31 March 2020, representing a significant increase compared to the previous year (12-month period ended 31 March 2020 - underlying revenues of US$7.3 million and Group revenues of US$4.4 million).

Divisional Update

Education - Wall Street English:following the government directives issued in mid-March, Wall Street English proceeded to temporarily close its English language learning centres and transition the delivery of its award-winning learning products online. As of 30 April 2020, all 1,800 Wall Street English students are active online. While the educational consultants continue to generate revenues through online and offline channels, the new sales pipeline is expected to be negatively impacted until May.

Education - Auston College Myanmar ('Auston'):Auston has also temporarily closed its campus and is currently delivering its educational products online through the G Suite for Education by Google. Following its partnership with Liverpool John Moores University ('LJMU'), announced on 20 February 2020, Auston commenced the marketing of LJMU's engineering training programmes and globally recognised degrees at the beginning of May. Student enrolment is expected to accelerate ahead of the commencement of degree courses in September 2020.

Education - Yangon American: in-line with government directives issued in mid-March, Yangon American has closed its campus on Insein Road, Yangon. All students have transitioned to online learning, delivered through a combination of G Suite for Education by Google, Zoom and other educational platforms. Yangon American awaits further instruction by the government in relation to a re-opening date. No significant impact is expected for new student enrolment ahead of the academic year commencing in August 2020.

Services - EXERA:as a result of COVID-19, EXERA forecasts an increase in the security risks in Myanmar including, among others, health and safety violations, petty crime, robberies and possible social unrest. While practicing social distancing measures, EXERA has rapidly adopted stringent business continuation plans and continues to deliver its guarding, facilities management and risk management services across its entire client base with ca. 1,300 security officers 165 sites. EXERA's sales pipeline is healthy and business performance is expected to remain stable, with the potential to improve as the pandemic evolves.

Hospitality - Ostello Bello: all hotels across Bagan, Mandalay and Nyaung Shwe are currently closed in accordance with the relevant government directives. Management has reacted quickly and the Group expects these moves to help slow the spread of the virus, safeguard the health of guests and staff and, simultaneously, reduce operating costs. These short-term measures have been deemed necessary to preserve the long-term sustainability of the business.

Cost Mitigations

The Group is currently undertaking contingency plans to support all stakeholders and ensure the on-going success of its businesses. MSH is minimising the impact on revenue and profitability by means of several cost-cutting initiatives that reduce both fixed costs and percentage of variable costs to total revenues. The initiatives are being implemented across all divisions and support functions. As part of the initiatives, non-prioritised expenses are being reduced and tight cost control is being implemented. Negotiations with landlords are taking place and conversations with suppliers have been initiated for reductions and / or better payment terms.

With regards to payroll and labour costs, executives across the Group have taken the decision to reduce their salaries and defer certain compensation. Several key management employees across the divisions have also agreed to substantial salary reductions. The Group is currently reviewing full-time and part-time staffing, temporary optimisation of workforce productivity and working hours for efficiency, and may, if necessary, implement leave without pay schemes.

Management firmly believes that the Group shall continue to play a responsible role towards its communities and stakeholders throughout these uncertain times. Concurrently with the measures mentioned above, the Group is also participating in several CSR initiatives, including the donation of Personal Protective Equipment to the Ministry of Health and Sports in Myanmar.

Cash Flow and Balance Sheet

In light of the current global economic outlook, management's focus is to protect cash flow and preserve liquidity. As at today, the Group continues to maintain a US$3.0 million undrawn Loan Facility with MACAN Pte. Ltd..

The Group is reviewing the timing and amount of any capital expenditures and these will only proceed when obligations occur. At the same time, the Group continues to strategically and opportunistically evaluate opportunities to grow its business portfolio organically and externally.

Commenting, Enrico Cesenni, Chief Executive Officer of Myanmar Strategic Holdings, said:'In light of the recent developments arising from COVID-19 in Myanmar, MSH remains focused, first and foremost, on ensuring the safety of its employees, customers and stakeholders while also continuing to be a responsible and equitable operator within its communities.

'MSH remains committed to Myanmar, with all our foreign and local personnel remaining on the ground to support our existing operations and to capitalise on new growth and investment opportunities. We are very grateful for their personal and professional dedication to MSH's mission.

'The Board is concentrated on protecting long-term value for its stakeholders and managing the near-term pressures on the business.We are confident in our strategy and are positive on the outlook and the resilience of the Myanmar economy and its people.'

For more information please visit www.ms-holdings.comor contact:

Notes to editors

Myanmar Strategic Holdings Ltd.

Myanmar Strategic Holdings Ltd. is an independent developer and manager of consumer businesses located in Myanmar, one of the fastest growing economies in the world. The Company's portfolio currently focuses on Education, Services and Hospitality with the view to expand within the broader consumer sector in Myanmar.

Education sector:the Company currently has exclusive development and franchising agreements with Wall Street English for ten English language centres across Myanmar over the course of the ten-year agreement. Two centres were opened in 2017, a third in August 2018, and a fourth in February 2020. As of February 2020, Wall Street English Myanmar served ca. 4,000 students since its inception.

The Company also operates a joint venture with Auston Institute of Management to develop and operate the Auston College Myanmar. The private school opened in May 2018 offering diplomas in Engineering Technology, Mechanical Engineering and Networking, Information Systems, and Security. English language learning is also provided by the Company's nearby Wall Street English centre. In February 2020, the Company announced a partnership with Liverpool John Moores University to provide high quality engineering training programmes for young, working professionals in Myanmar, to be taught by Auston College Myanmar's teaching staff at its Junction Square complex in Yangon.

The Company launched its first private K-12 international school, the Yangon American International School in Yangon, in August 2019.

Services sector: through its acquisition of EXERA, the Company offers security, risk management and secure logistics services, including cash-in-transit. Founded in 2013, EXERA employs approximately 1,300 well-trained and high-quality security officers making it one of the largest security services providers in Myanmar.

Hospitality sector:through its portfolio, the Company currently manages over 470 beds across four boutique hotels in three core tourist locations across Myanmar, operating under the award winning Ostello Bello budget hospitality brand. MSH operates an asset light strategy, entering into long-term operating and management agreements with local hotel owners.

Myanmar was one of the fastest growing economies in Asia in 2017-2019 (Source: Asian Development Bank). In 2020 and 2021, its annual GDP growth is expected to be respectively 4% and 7% (Source: Asian Development Bank), making it one of the fastest growing economies in the world.

MSH is well positioned to provide investors early exposure to Myanmar's strong economic fundamentals enhanced by ASEAN's wider growth prospects.

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