China Weaving Materials Holdings Limited provided consolidated earnings guidance for the year ended December 31, 2023. Based on the preliminary assessment of the Group's consolidated management accounts and information currently available to the Board, it is expected that the Group may record a consolidated net loss of approximately RMB 26 million for the year ended 31 December 2023 (the "Year") as compared to a consolidated net loss of approximately RMB 13 million for the year ended 31 December 2022. The expected consolidated net loss of the Group for the Year is mainly attributable to the decrease in gross profit resulting from decrease in revenue and decrease in gross profit margin of the Group's yarn products.

Based on the information currently available to the Board, the Group is expected to record consolidated revenue of approximately RMB 1,107 million for the Year as compared to consolidated revenue of approximately RMB 1,318 million for the year ended 31 December 2022. The decrease in revenue was mainly due to the decrease in sales volume and average selling prices of the Group's yarn products. The decrease in sales volume was due to poor market conditions.

In response to such market conditions, the Group adjusted its product portfolio, offering more mass market products with lower average selling prices. The decrease in gross profit margin was mainly due to the adoption of a more aggressive pricing strategy for the Group's products in order to control the level of inventory and to achieve a desirable utilization rate for the Group's production capacity. As result of a stagnant global economy, the demand for textile and apparel products during the Year has been weak in general and the market conditions for the textile industry in the PRC have been challenging.