Feiyu Technology International Company Ltd. provided earnings guidance for the year ended 31 December 2021. It is anticipated that the Group may record a net loss ranging from approximately RMB 69.0 million to RMB 89.0 million for the year ended 31 December 2021 as compared to a net loss of approximately RMB 18.1 million for the year ended 31 December 2020. The expected increase in net loss is primarily due to the following factors: delay in launching new key games due to the Group's strategic decision to invest additional development time and resources to enhance the quality of such new key games as well as the freeze on approval of new game licenses in the second half of 2021.

an impairment loss of goodwill of approximately RMB 8.7 million to be made which is due to the recoverable amount of a cash-generating unit ("CGU") to which the goodwill relates is expected to be less than the carrying amount of the goodwill. The underperformance in revenue generating activities of the CGU during the second half of 2021 was considered as an indication of the impairment for the goodwill aforementioned. an impairment loss of investment in associate of approximately RMB 7.7 million to be made which is due to the recoverable amount of the investment is expected to be less than its carrying amount.

The intention of the game publisher to terminate the game distribution agreement of the associate in January 2022 was considered as an indication of the impairment for the investment in associate aforementioned. a significant increase in staff costs because the Company set up a new development team in late 2020 to focus on developing a first-person shooter game, which is one of the major areas the Group focuses on. The increase in staff costs was also because there was a social insurance exemption due to the COVID-19 pandemic for the year ended 31 December 2020, while there was no such exemption for the year ended 31 December 2021.