Sterling Group Holdings Limited announced further details of its auditor change following Baker Tilly’s resignation on 31 March 2026 and the immediate appointment of Rongcheng CPA.

Revenue backdrop • Interim revenue for the six months ended 30 September 2025 fell 35% to about HK$179 million, swinging the Group from a HK$3.20 million profit to a HK$7.60 million loss. • Management has pursued cost-containment measures, including negotiating reduced audit costs in light of the smaller operating scale.

Chronology and fee negotiations • September 2025: Shareholders re-appointed Baker Tilly; audit fee for FY 2026 expected to align with FY 2025’s HK$1.00 million. • January–March 2026: The Company invited proposals from audit firms; five quotations ranged from HK$0.70 million to HK$1.10 million. • 27 March 2026: Audit Committee met Baker Tilly, Confucious International CPA and Rongcheng; no fee consensus reached with Baker Tilly. • 31 March 2026: Baker Tilly resigned; no fees paid for FY 2026 work to date. • The Board, on Audit Committee recommendation, appointed Rongcheng, whose HK$0.70 million proposal was 30% below Baker Tilly’s HK$1.00 million quote.

Rongcheng engagement details • Planned audit hours: 1,885, comparable to Baker Tilly’s 1,834. • Core team: engagement director, engagement quality reviewer, manager, two seniors, two associates and a technical reviewer; all hold HKICPA or equivalent professional credentials with over 15 years’ experience at senior levels. • Audit timetable: planning and opening-balance work in April 2026; fieldwork April–June 2026; results announcement by late June and annual report by late July 2026. • Component auditor BDO Sri Lanka retained; coordination deemed sufficient within the compressed schedule.

Audit Committee assessment • Evaluated governance, independence, resources, methodology and prior regulatory record. • Noted Rongcheng’s competitive fee structure reflects utilisation of staff during its slack season (April–July). • Satisfied that audit quality will not be compromised given comparable hours, broader on-site staffing (three to four senior personnel versus two previously) and Rongcheng’s registration as a Public Interest Entity auditor for over 55 Hong Kong-listed companies. • Considered AFRC’s January 2026 reprimand of Rongcheng related to administrative matters, now rectified, and concluded independence and competence remain intact.

Impact and outlook With the auditor transition, Sterling Group targets lower assurance costs while maintaining audit quality amid revenue pressure and challenging market conditions. Shareholders and potential investors are advised to exercise caution when dealing in the Company’s securities.