The board of directors of Fortunet e-Commerce Group Limited reported that based on the preliminary unaudited consolidated management accounts of the group for the six months ended June 30, 2015, it is expected that the total revenue of the group will decrease by approximately 60% as compared to the same period last year and the total impairment of assets, including property, plant and equipment, inventories and receivables, related to the train and railway business and the manufacture and sale of axle and component parts of motor vehicles will be revised to approximately RMB 590 million. Such revision is mainly attributable to the continuing depressed business environment of the above sectors which brought about under utilization of production capacity of the Group's business in the axle and component of motor vehicles. Price competition among competitors is also significant in the motor vehicles repair market.

The reason for the above increase was due to the fact that, apart from provisions of RMB 250 million needed to be made to the group's train and railway business, the Board is of the view that it would be prudent to make additional provisions of RMB 340 million in respect of the group's fixed assets, inventory and receivables relating to the group's truck business which had suffered operating losses over the years. In addition, the loss on changes in fair value of the derivative component of approximately RMB 70 million (subject to finalisation) on the secured convertible bonds due 2018 issued by the company on June 3, 2015, will increase the losses of the group for the six months ended June 30, 2015.