China Sanjiang Fine Chemicals Company Limited provided earnings guidance for the year ended December 31, 2022. The Company expects its net loss attributable to equity holders for the year ended 31 December 2022 will be in a range between RMB 200 million and RMB 360 million, representing a substantial decrease by approximately 200% as compared to the net profit attributable to equity holders of the Company for the year ended 31 December 2021 of RMB 380.6 million. The expected substantial decrease in net profit attributable to equity holders of the Company was primarily attributable to: the increases in average selling prices of major products namely ethylene oxide, ethylene glycol and polypropylene were in a less extent when comparing to the increase in average market price of feedstock, Methanol as a result of the outbreak and global pandemic of the novel coronavirus and certain global emergencies, which led to lower demands from downstream level and higher average market prices of upstream; and the inclusion of one-off item in relation to the suspension of operation of the joint venture operation with Lotte Chemical Corporation which incurred loss of RMB 100 million, foreign exchange losses resulted from the deprecation of RMB against USD; and the inclusion of one-off item in relation to the provision for impairment for property, plant and equipment.

Despite the abovementioned downsides, the management of the Group is expecting a number of upsides in 2023 as a result of the withdrawal of prevention measures for COVID-19 Pandemic since early 2023, which leads to improvement of demand and supply and logistic arrangement of feedstocks and major products and the improvement of average selling price of major products in certain extents.