The board of China Rare Earth Holdings Limited informed the shareholders of the Company and the potential investors that, based on the unaudited
consolidated results of the Company for the six months ended 30 June 2023 (the "Period"), the Group is expected to record a loss of over HKD 100 million, as compared to a profit of approximately HKD 11.1 million for the six months ended 30 June 2022. Such shift from profit to loss was mainly attributable to (i) the continuous decrease in price of rare earth and refractory material products during the Period, resulting in a decrease in the Group's revenue; and (ii) the increase in the impairment provision for inventories.