On behalf of the board of directors of Grace Wine Holdings Limited (“Grace Wine”, and together with its subsidiaries, ”we” or “us”), I would like to present Grace Wine’s 2022 annual report.

The fiscal year of 2022 was a very difficult year for us with many cities in China facing frequent lockdowns. In particular, our primary market, Shanxi, was in lockdown for nine months. As wine is mostly consumed at restaurants rather than at home, the lockdowns have severely affected our sales.

COVID-19 regulations and restrictions have also affected our harvest. Despite our teams experienced lockdowns in Shanxi or in Ningxia for a few months of the year, we managed to pick and process some of the best fruit. The level and quality of crops in Ningxia was similar to that of 2019, with some plots even potentially outperforming previous vintages. For Shanxi region, due to the relatively cool weather in 2022, we expect a slightly reduced fruit density in the finished wine, but at this point the wine shows delicate fruit profiles and spiciness. For details, please refer to our vintage reports on our website: www.grace-wine.com.

I want to take this opportunity to thank our team for their dedication and flexibility. They found ways to continue with the winemaking process, fulfill orders, and ensure the safety of everyone involved despite the lockdowns. In the face of uncertainty, our team stayed positive and provided mutual support to successfully execute our strategy
during these challenging times. I couldn’t be prouder of them.

Our gin and whisky distillery in Fujian is expected to commence operation in mid-2023. We experienced some delaysdue to COVID-19. However, we are optimistic that the grand opening of our gin and whisky distillery will infuse fresh energy and unlock new opportunities for us. We do invite all of you to come for a visit.

The year of 2023 will continue to be challenging. We will focus on enhancing efficiency by further consolidating our operation and building a robust platform for future growth.

We will continue on the path of building Grace Wine into a premium alcoholic beverage company in China, and generate value for our shareholders in the long run.