Reply To Inquiries: 268 Legco Compliance

In July 10th, the Cmi Holdings Ltd reported the inquiry report of 2018 on the annual report of the Shenzhen Stock Exchange, which reported that the total number of brand stores in the 2018 years decreased by 268, and the closing procedures were legal and compliance. The increase in net profit was higher than the increase in business receipts, mainly due to the increase in non recurring gains and losses in the current period. The fluctuation of the inventory balance was related to the balance of raw materials, the balance of inventory merchandise and the reserve for depreciation.

About the Shenzhen Stock Exchange's report on the operation of the bird shop, the change of stores, the procedures for closing stores and so on.

The announcement pointed out that in 2018, the brands of the wedding birds added 366 stores and 268 stores, and the total number of stores was 1576.

Among them, the main brands reported 123 birds to add 101 fewer stores, and the remaining 740 stores. The company says that the company's procedures are legitimate.

In addition, according to the Shenzhen Stock Exchange's enquiry about the reasons for the increase in inventories, the bird said it was mainly affected by the rise in the balance of raw materials, the balance of inventory merchandise and the decline in reserve price.

At the same time, although the company's current stock price depreciation reserve ratio has declined compared with the previous period, but the bird in the reporting period has maintained the consistency of the policy of inventory depreciation. Its decline is due to the inventory structure adjustment resulting in product optimization, and the provision for inventory depreciation is reasonable.