The board of directors of Stelux Holdings International Limited provided a business update of the Group as described below to the shareholders and potential investors of the Company. The Brand Owner has recently discussed with the Group that it intends to modify the current distributorship model of the Products for the Singapore, Brunei and Malaysia markets, by directly carrying out the distributions in these three markets through its own subsidiary. If this intention materialises, the Group will no longer act as the wholesale distributor of the Products in Singapore, Brunei and Malaysia.

However, the Group will continue to be the sole wholesale distributor of the Products in Hong Kong and Macau, and will continue to be a retailer of the Products in Hong Kong, Macau, Singapore and Malaysia. Based on the discussions with the Brand Owner, the Board notices that this modification will take place on 1 October 2022. The Board is of the view that this modification of distributorship arrangements of the Products in Singapore, Brunei and Malaysia will not lead to a material adverse impact on the business operations and financial condition of the Group.

The revenue of the wholesale distribution of the Products generated from Singapore, Brunei and Malaysia in aggregate represented about 1.5%, 2.4% and 4.5% of the Group's total turnover for each of the financial years ended 31 March 2020, 2021 and 2022, respectively. The Group will continue to: distribute as sole wholesale distributor for "GRAND SEIKO" and "CREDOR" watches in Hong Kong and Macau, and "SEIKO" watches in the Existing Markets; act as retailer for "GRAND SEIKO", "SEIKO" and "CREDOR" watches in Hong Kong, Macau, Singapore and Malaysia. The Group will also continue to develop and strengthen its self-owned watch brands and other third party watch brands at the retail level.

After excluding the wholesale distribution sales of the Products to third parties in Singapore, Brunei and Malaysia for the quarter from 1 April to 30 June in both years of 2022 and 2021, the Group recorded a turnover growth of 26% year- on-year. The information contained in this announcement is based on the latest information available to the Board. The Board will update the shareholders and potential investors of the Company as and when appropriate.