Central China New Life Limited provided consolidated earnings guidance for the six months ended June 30, 2023. The board of directors of the company informed the shareholders of the company and potential investors that, based on a preliminary review of the unaudited management accounts of the Group, notwithstanding the continuing increase in GFA under management and the gross margin of the core underlying business of property management, it is expected that the Group is likely to record an unaudited consolidated net loss ranging from RMB 200 million to RMB 400 million for the six months ended 30 June 2023, compared with the unaudited consolidated net profit of the Group of RMB 301 million for the six months ended 30 June 2022. The expected unaudited net loss is primarily attributable to the liquidity crisis caused by the downturn of the real estate industry, leading to the increase in credit risks of relevant trade receivables of real estate developers.

Therefore, on the basis of prudent principles, the Group performs impairment tests on the carrying amount of trade receivables and financial assets and others, and makes reasonable impairment provision, which is expected to have a negative effect on profits for the first half year.