Texhong International Group Limited provided consolidated earnings guidance for the year ended December 31, 2023. Based on the consolidated management accounts of the Group for the year ended 31 December 2023, the Group is expected to record a net loss of about RMB 0.3 billion for the Year, as compared to the net profit of the Group for the year ended 31 December 2022 of approximately RMB 0.2 billion. The expected net loss is mainly attributable to the continued weak demand for textiles in the overseas markets during the Year, resulting in weak product selling prices and low utilization rates of the Group's production capacity, which in turn affected the unit production costs and gross profit margins of the Group.

Moreover, the increase in interest rates by the United States of America (?USA'') Federal Reserve during the Year increased the finance costs of the Group, thereby aggravating the loss for the Group. However, the gross profit margins of the Group has improved in the second half of the Year with the slight recovery of the demand in the overseas textile markets, and together with the stabilization of cotton prices, the Group's profitability is expected to gradually improve. The Group shall continue to closely monitor the market situation and will focus on optimizing product mix to improve the utilization of the Group's production capacity, as well as improving technological transformation and upgrading so as to decrease unit costs.