Fortunet e Commerce : INSIDE INFORMATION ANTICIPATION OF DECREASE IN LOSS

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CHANGYOU ALLIANCE GROUP LIMITED

暢 由 聯 盟 集 團 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1039)

INSIDE INFORMATION

ANTICIPATION OF DECREASE IN LOSS

This announcement is made by Changyou Alliance Group Limited (the "Company", together with its subsidiaries, the "Group") pursuant to Rule 13.09(2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions (as defined in the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (the "SFO").

Based on the preliminary assessment by the Group's management and the unaudited consolidated management accounts of the Group for the six months ended 30 June 2020, the board (the "Board") of directors (the "Directors") of the Company wishes to inform the shareholders of the Company (the "Shareholders") and potential investors that the Group expects to record a decrease in its net loss for six months ended 30 June 2020 of more than 65% as compared to that for the six months ended 30 June 2019 of RMB77 million. Such expected decrease in the Group's net loss is primarily attributable to, among other things:

1. the recognition of a reversal of impairment losses on financial assets of approximately RMB23 million because of the repayment of loan receivables during the six months ended 30 June 2020 which were impaired for the year ended 31 December 2019; and
2. a reduction of selling and distribution expenses, administrative expenses and research and development costs as a result of the implementation of cost saving measures by the Group during the six months ended 30 June 2020.

The information contained in this announcement is only based on the preliminary assessment by the Group's management and has not been audited or reviewed by the auditors of the Company. Such information is subject to the finalisation of the results of the Group for the six months ended 30 June 2020, which is expected to be announced by end of August 2020.

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Shareholders and potential investors are advised to exercise caution when dealing in the shares of the Company.

By order of the Board

Changyou Alliance Group Limited

Mr. Cheng Jerome

Chairman

Hong Kong, 21 August 2020

As at the date of this announcement, the executive Directors of the Company are Mr. Cheng Jerome and Mr. Yuan Weitao; the non-executive Director of the Company is Mrs. Guo Yan; and the independent non-executive Directors of the Company are Mr. Wong Chi Keung, Mr. Liu Jialin and Mr. Chan Chi Keung Alan.

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