Huisheng International Holdings Limited provided earnings guidance for the year ended 31 December 2017. The group is expected to record a substantial decrease in profit for the year ended 31 December 2017 as compared to that in the last year which is mainly resulted from the decrease in revenue and average gross profit margin. The reason for such decrease is due to the decrease in the slaughtering volume and the selling price. The decrease of volume is a result of keen competition from imported pork products and also the changing dietary habit. The decrease of selling price is due to the lower unit price as compared with the last year as a result of supplies over demands. Given the selling price of pork products is more elastic than the cost of hogs, this resulted that the average selling price of pork products decreased at a faster pace than the average cost of hogs. Also, the smaller slaughtering volume means the lower utilization rate, and hence each products may bear more fixed costs. Secondly, the company recognized an equity-settled share-based payment expenses of approximately RMB 7.6 million for the share options granted to an executive director, employees and consultants on 10 April 2017. Furthermore, the company recognized a loss arising from change in fair value of biological assets while there was a gain of approximately RMB 16.3 million in 2016. This is mainly due to the decrease of hog price may also lead to the lower value of the breeder hogs.