Tokyo Chuo Auction Holdings Limited
東京中央拍賣控股有限公司
(Incorporated in Hong Kong with limited liability)
(Stock code: 1939)

First Interim Results Announcement After Listing
Gross Profit Surged by 10.1% yoy to HK$43.5 million

[Hong Kong－28 November 2018] Tokyo Chuo Auction Holdings Limited ("TCA" or the "Company", together with its subsidiaries, the "Group", stock code: 1939), a well-recognized auction house of Chinese and Japanese artworks in Hong Kong and Japan, was pleased to announce its interim results for the six months ended 30 September 2018 (the "Period") on 27 November 2018.

For the six months ended 30 September 2018, revenue recorded a minor year-on-year ("yoy") decrease of 0.9% to HK$62.9 million. As the low-cost private sales increased and the Group implemented efficient cost control measures, the gross profit of the Group increased by 10.1% yoy to approximately HK$43.5 million during the Period. Gross profit margin of the Group rose by 6.9p.p to 69.1%. Loss attributable to owners of the Company was HK$13.7 million, which was mainly attributable to the listing expenses of approximately HK$13.5 million and the changes in fair value of convertible notes during the Period. When excluding the changes in fair value of convertible notes and other one-off expenses related to the listing project, the adjusted net profit of the Group was amounted to HK$4.4 million, representing a decrease of 24.4% yoy.

The Group believes that a well-recognized brand and a strong customer network are the foundation of a successful auction house. Profound brand influences and professional services are the key to build reputation among peers and attract collectors with premium collections. These are essential factors for the Group to expand its seller and buyer database and thus form a healthy business cycle. For this reason, in addition to the routine previews and exhibitions during the Period, the Group also hosted the 8th Anniversary preview tours in Hangzhou, Xiamen and Shenzhen in July 2018, showcasing the most premium items. Such tours have successfully attracted new customers and nurture a group of potential buyers for the Group's Japan Autumn Auction in September. In late October 2018, the Group also invested more resources to host additional previews in Shenzhen, which has not only enhanced the brand awareness of Tokyo Chuo Auction, and has also drawn public attentions to the Group's Hong Kong Autumn Auction in November and Tokyo Spring Auction in March 2019. Despite increase in expenses relating to travelling and labour, the Group believes that these expenditure are essential for promoting the Tokyo Chuo Auction brand and expanding the Group's customer base.

During the Period, the Group launched two auctions in Hong Kong and Japan, which were held in May and September 2018, respectively. During the 2018 Spring Auction in Hong Kong, the Group offered 655 auction lots, out of which 375 were sold at an aggregate hammer price of approximately HK$85.3 million. The Group held four sessions, including "Fine Chinese Modern Paintings", "Fine Chinese Classical Paintings and Calligraphy", "ICHIGO ICHIE - The Art of Tea Ceremony" and "Important Chinese Ceramics and Works of Art". Meanwhile, the 2018 Autumn Auction in Japan featured 14 different sessions, offering 3,075 auction lots, out of which 1,691 were sold at an aggregate hammer price of approximately JPY2,224.8 million. These two auctions attracted a considerable amount of customers, collectors and artwork lovers, with most of the hammer price far exceeding the valuation.

In addition, once again, the Group successfully launched its autumn auction at the Four Seasons Hotel from 23 to 26 November 2018 in Hong Kong, featuring a series of well-documented art treasurers handed down from generation to generation, in which includes "A Magnificent and Rare Yellow and Green Enameled Vase Seal Mark, Qing Dynasty, YongZheng Period (清雍正 黃地綠彩福壽祥雲折枝花卉紋橄欖瓶)", "Wan Shou Da Qing Ba Geng Full Rhyme (萬壽大慶八庚全韻詩)" and "Centruy-old Blue Ticket Song Ping Pu'er Tea Cakes (百年藍票宋聘號-普洱茶)" etc.. The 2018 Hong Kong Autumn Auction consisted of 7 sessions and the Group upgraded one of the routine session, "ICHIGO ICHIE - the Art of Tea Ceremony", into "ICHIGO ICHIE - The Important Collection of Rare and Vintage Pu'er Tea", during which showcased over 60 auction lots of Pu'er Tea in superb quality.

As an important gateway to China, Hong Kong is a mature auction market with rich culture and artistic ambience. In addition, collectors in Hong Kong are experienced and active with world-class taste and rich resources. Therefore, Hong Kong is the key market for TCA in its future development roadmap. In addition to the Hong Kong market, the Group will continue to increase marketing and branding efforts to further enhance brand awareness among high-net-worth individuals in the Asia-Pacific region. Such initiatives will cement a solid foundation for the Group to broaden its customer network and become an international auction house.

Mr. Ando Shokei, Executive Director and Chairman of Tokyo Chuo Auction, stated that: "ICHIGO ICHIE - the Art of Tea Ceremony, as a special session presented by TCA, has been well-recognized among collectors. As the tea and tea wares auction market enters a strong growth trend, more and more collectors are looking for rare and premium items. To honor our first auction after successful listing in the HKEX, as well as our 5^th Anniversary in Hong Kong market, we featured an exceptional session of prestige Pu'er tea collection in the 2018 Hong Kong Autumn Auction.」

Mr. Ando Shokei further commented that: "TCA was successfully listed on the Main Board of the Hong Kong Stock Exchange, which marked a milestone of our development. As a one of the major financial center, Hong Kong is a world-class cultural hub in Asia. Our successful listing in Hong Kong provides us a broader platform to venture the Asia and global market. Looking forward, the Group's mission is to become one of the international auction houses in Chinese and Japanese art auction business. As a result, we are actively expanding our footprint to other markets with strong potentials, aiming to establish and enhance Tokyo Chuo Auction's brand image in other major Asian cities and the global market. With such targets in mind, the Group will continue to organize various marketing activities, exhibition tours, previews and cross-over events to expand our seller and buyer network. Furthermore, we will continue to increase our efforts in promoting the brand of TCA whilst to solidify our relationship with VIP customers. These initiatives will further strengthen our market position so as to lay a solid foundation of the Group's future development."

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About Tokyo Chuo Auction Holdings Limited

- Founded in Japan in 2010, Tokyo Chuo Auction Holdings Limited is a well-recognized auction house of Chinese and Japanese artworks in Japan and Hong Kong. The Group held its first auction in Japan in 2011 and entered into Hong Kong market in 2013. With its specialization in auctioneering Chinese paintings and calligraphies, Chinese antiques, Japanese and Chinese tea wares and others, the Company organizes two auctions in Japan and Hong Kong per annum, respectively.

- Through its extensive networks built in Hong Kong and Japan, the Group has developed a solid and expanding customer base, covering artworks artists, masters, experts, merchants, collectors, art galleries and museums.

- The Group ranked second and fifth amongst all auction houses with Chinese art auction business in Japan and Hong Kong with a market share of 26.8% and 4.4% in 2017, in terms of transaction value from the Chinese art auction business in Japan and Hong Kong, respectively.

- Looking into the future, the Group will strive to broaden its business segments through venturing into the contemporary art and jewelry auction markets; as well as setting up offices in Beijing and California, expanding its business network and global footprints.

This press release is issued by DLK Advisory Limited on behalf of Tokyo Chuo Auction Holdings Limited.

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