Dynasty Fine Wines Group Ltd. announced that the Group is expected to record a loss for the year ended December 31, 2012 as compared to an audited consolidated profit for the previous year. Based on the preliminary review of the information currently available, such decrease is mainly attributable to a decrease in sales volume compared to the previous year's as a result of (1) the impact of reform on the Group's sales and distribution model as disclosed in the company's 2012 interim report. The reform continues to progress on track but the pace of reform was slower than expected, especially in Zhejiang province and Shanghai city, and will take time to implement; and (2) weaker demand of domestic wine products amidst the underperformed economic environment in the People's Republic of China and impact of imported wines.

An increase in distribution costs as a percentage of revenue compared to the previous year's because of continuous increase in investment in brand building, sales and marketing in order to ensure sustainable development of the Group and optimize the product mix.