Tao Heung Holdings Limited provided earnings guidance for the six months ended 30 June 2022. For the six months, the company expected to record a decrease in revenue of approximately 15% to 20% for the Period as compared to the corresponding period in 2021 and a loss attributable to equity holders of the Company of approximately HKD 100 million to HKD 105 million for the Period as compared to a loss attributable to equity holders of the Company of HKD 21 million for the corresponding period last year. It is mainly attributable to: i. a drop in revenue of the Group in the range of 15% to 20% as compared to the period ended 30 June 2021 and ii.

impairment loss on property, plant and equipment and right-of-use assets for restaurants of the Group that were underperformed during the Period During the Period, the COVID-19 pandemic continued to impact on the economy of Mainland China and Hong Kong. Since March 2022, travel restrictions and lockdowns imposed in major cities in Mainland China due to outbreaks of more contagious COVID-19 variants. Some of restaurants located in Shanghai & Guangdong province were temporarily closed and/or suspended dine-in services for the period from March to June 2022.

In Hong Kong, the city faced severe headwinds resulting from the fifth wave of the pandemic at the start of 2022, which led the HKSAR government to impose restrictions on evening dining from late-January to the middle of April. The aforementioned developments invariably affected the Group, which included the suspension of Hong Kong operations for 1,363 shop-days (totalling 41 shops), and of Mainland China operations for 1,049 shop-days (totalling 49 shops). In face of multiple challenge, management team has devised various strategies to strengthen competitive advantages.

Such strategies included revamping the brands of restaurants, advancing digitisation and automation, introducing the new ingredients and menus as well as fully capitalising on various distribution channels. Furthermore, the Group has taken measures to control rental rates, labour cost and other operating costs.