The board of directors of China 33 Media Group Limited informed the shareholders of the company and potential investors that based on the preliminary assessment by the Board of the financial information of the company currently available and the unaudited consolidated management accounts of the group for the year ended 31 December 2015, which has neither been reviewed by the audit committee of the company nor audited by the auditors of the company, the group is expected to record a loss for the year ended 31 December 2015. The Board believes that the loss was mainly attributable to the drop in revenue and increase in cost of sales. Reasons contributing to the reduction in revenue include: termination of advertisings on some loss making railway stations for magazine (City Life) and billboards and LEDs installed at certain selected train stations; and cessation of periodical (Shanghai Railway) since September 2014.

With early termination of advertising on billboards and LEDs installed at certain selected train stations, those construction and installations cost of billboards and LEDs which are supposed to be used till expiry of rental period in 2018, are fully impaired this year, resulting an increase in cost of sales.