Changfeng Axle (China) Company Limited provided group earnings guidance for the six months ending June 30, 2012. The board of directors of the company informed the shareholders of the company and potential investors that based on the preliminary review of the unaudited management accounts of the group for the four months ended 30 April 2012, the net profit and revenue of the group for the six months ending 30 June 2012 is expected to record a significant decline as compared with the corresponding period in 2011. It is expected the group may incur a loss for the six months ending 30 June 2012 should the financial performance of the company continue to deteriorate for the two months ending 30 June 2012. Based on the information currently available, the Board considers that such significant decline is primarily attributable to the decrease in sales volume of the group's products as a result of the weak market of medium and heavy duty truck and the continuing pressure exerted on the gross margins of the group under keen competition.