Hongcheng Environmental Technology Company Limited provided earning guidance for six months ended 30 June 2023. The board of directors inform shareholders of the Company (the ``Shareholders'') and potential investors that, based on aed preliminary review on the unaudited consolidated management accounts of the Group and information currently available to the Board, it is expected to record a profit for the period, all attributable to owners of the Company of approximately RMB 10.5 million for the six months ended 30 June 2023, representing a decrease of approximately 76.6% compared to the profit for the period, all attributable to owners of the Company of approximately
RMB 44.9 million recorded for the corresponding period in 2022. It is expected to record a revenue of approximately RMB49.2 million for the six months ended 30 June 2023, representing a decrease of approximately 57.1% compared to the revenue of approximately RMB 114.6 million recorded for the corresponding period in 2022. The Board considers that the decrease in the amounts of profit for the period, all attributable to owners of the Company and revenue is mainly attributable to: (i) the Group intends to commence production of the sulfuric acid production line in the third quarter of 2023 in order to enrich the product portfolio and expend current business of the Group. As such, the Group has reserved ample supply of pyrite concentrate for the commencement of production of the sulfuric acid production line as pyrite concentrate is the main raw material for sulfuric acid production; (ii) a decrease in both the sales volume and unit price of pyrite concentrate due to the downturn in the manufacturing industry which requires pyrite concentrate as a main raw material in manufacturing process; and (iii) a reduction in the quantity of cyanide tailings provided by upstream customers, resulting in a decline in revenue of gold mine hazardous waste treatment services compared to the same period last year.