BaWang International (Group) Holding Limited provided earnings guidance for the six months ended June 30, 2018. For the six months, the company expected that the group will record a net operating loss ranging approximately from RMB 14.0 million to RMB 15.0 million for the six months ended 30 June 2018 as compared to a net operating profit of approximately RMB 1.1 million for the same period in 2017. The expected net operating loss in first half 2018 was primarily attributable to the following factors: (1) a decrease in other income because the group ceased to receive research and development subsidies from the PRC government, (2) an increase in the group's selling and distribution expenses (such as sales promotions and marketing) due to increased efforts by the group to promote its brands and to distribute its products through the online channel, and (3) an increase in the costs of direct labour and packaging materials. The group's net operating loss was partially offset by an increase in revenue in first half 2018 as compared to first half 2017.