China Digital Video Holdings Limited board of directors announced based on a preliminary review and analysis of the latest available unaudited consolidated management accounts of the Company, it is expected that the Group will record a net loss for the year ended 31 December 2017 as compared to a net profit recorded by the Group for the year ended 31 December 2016. The expected loss for the Financial Year 2017 was primarily attributable to the non-cash share-based compensation expenses of approximately RMB 31.2 million related to the shares of the Company granted by Mr. ZHENG Fushuang, the ultimate controlling shareholder of the Company, to Mr. LIU Baodong and Mr. GUO Langhua in January 2017. The gain of approximately RMB 276.1 million arising from fair value gain on redeemable convertible preferred shares for the Financial Year 2016. The Group did not record any such gain for the Financial Year 2017 as all the redeemable convertible preferred shares of the Company have been converted to ordinary shares when the Shares listed on the GEM of the Stock Exchange in June 2016. The decrease in the revenue from sales of solutions, products and services for the Financial Year 2017 as compared to that of the Financial Year 2016. The financial effect of approximately RMB 31.6 million as a result of the adoption and operation of share award scheme of the Company and post-IPO share option scheme of the Company and provisions were made on the impairment loss on certain long overdue trade and other receivables when the recoverability is considered remote.