Little Sheep Group Limited will be removed from Hang Seng Composite Index

Little Sheep Group Limited, Special/Extraordinary Shareholders Meeting, Jan 06, 2012., at 15:01 China Standard Time. Location: Regus Business Centre, 35/F, Central Plaza. Agenda: To approve and give effect to the reduction of the issued share capital of the company arising as a result of the Scheme of Arrangement and to authorise the Directors to do all acts and things considered by them to be necessary or desirable in connection with the implementation of the Scheme of Arrangement; to approve the increase of the issued share capital of the Company to the amount prior to the cancellation of the Scheme Shares to pay up in full at par such number of new Little Sheep Shares as is equal to the number of Scheme Shares cancelled as a result of the Scheme of Arrangement credited as fully paid, for issuance to Wandle Investments Limited; and to approve, ratify and confirm the shareholders' agreement dated on or around December 9, 2011 entered into among Wandle Investments Limited, Yum! Restaurant China Holdings Limited, Possible Way International Limited, Mr. Zhang Gang and Mr. Chen Hongkai.

Little Sheep Group Limited announced unaudited consolidated earnings results for the six months ended June 30, 2011. For the period, the company reported revenue of RMB 804,483,000 against RMB 701,470,000 in the same period of last year. The increase was primarily due to an increase in the number of restaurants and growth in same-store sales. Profit from continuing operations before tax was RMB 48,028,000 against RMB 57,228,000 in the same period of last year. Profit from continuing operations was RMB 39,100,000 or 3.25 RMB cents per diluted share against profit from continuing operations of RMB 42,206,000 or 3.92 RMB cents per diluted share in the same period of last year. Profit from continuing operations dropped by 7.4% year-on-year as a result of the cumulative effects of the foregoing factors. Profit was RMB 35,836,000 against RMB 39,597,000 in the same period of last year. Profit attributable to owners of the parent was RMB 30,606,000 or 2.94 RMB cents per diluted share against profit attributable to owners of the parent of RMB 38,083,000 or 3.67 RMB cents per diluted share in the same period of last year. Net cash outflow was RMB 4,879,000. Due to the increase in investment for business expansion, the profit attributable to shareholders fell 19.6% to RMB 30.6 million. Profit for the six months ended June 30, 2011 fell 9.5% year-on-year as a result of the cumulative effects of foregoing factors. Net cash inflow from operating activities in the first half of 2011 was RMB 134.0 million, which was primarily attributable to increased cash inflow from the company's revenue. Net cash outflow from investing activities in the first half of 2011 was RMB 82.1 million, which primarily consisted of RMB 79.1 million of investments in restaurants, production bases and the acquisition of restaurants. Capital expenditures for the first half of 2011 was RMB 58.7 million, which were primarily attributable to expenditures on information technology, the opening and refurbishment of company-owned restaurants, and the construction of production bases. The company provided capital expenditure guidance for the second half year of 2011. For the period, the company expects capital expenditure of approximately RMB 138.0 million which will be funded by internal resources.