Trigiant : FINANCIAL UPDATE AND PROFIT WARNING

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TRIGIANT GROUP LIMITED ڲٝණྠϞࠢʮ̡*

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 1300)

FINANCIAL UPDATE AND PROFIT WARNING

This announcement is made by Trigiant Group Limited (''Company'', together with its subsidiaries, the ''Group'') pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (''Listing Rules'') and the Inside Information Provisions (as defined under the Listing Rules).

The board (''Board'') of directors of the Company wishes to inform the shareholders and potential investors of the Company on the following updates of the Group based on the Board's preliminary assessment of the unaudited consolidated management accounts of the Company for the year ended 31 December 2020 (''Year 2020'') and the information currently available to the Company:

(1) The global outbreak of COVID 19 pandemic (''Pandemic'') has hindered the construction progress of 5G base stations of telecommunications operators in various countries in the first quarter of 2020, which affected the Group's orders and temporarily disrupted the production and upstream supply chain of the Group. The Pandemic has stabilised in the People's Republic of China in the second half of 2020 and the Group's sales has improved significantly as a result. In this regard, the Group expected that the turnover for the second half of 2020 will be approximately RMB1,710 million, representing an increase of 48.0% as compared to the turnover for the first half of 2020 (approximately RMB1,160 million), but it is expected that the turnover for Year 2020 will still be less than that for the year ended 31 December 2019 (''Year 2019'').

(2) The Company is expected to record a loss of approximately RMB140 million for Year 2020 as compared to the profit for the year of approximately RMB360 million recorded in Year 2019. The Group's operating profit after taxation and before impairment losses for Year 2020 was approximately RMB300 million, representing a decrease of 27.5% as compared to the operating profit after taxation and before impairment losses for Year 2019 (approximately RMB410 million).

*

For identification purpose only

The loss for Year 2020 is primarily attributable to the following factors:

(a) The Group is expected to record a turnover of approximately RMB2,870 million for

Year 2020, representing a decrease of 18.9% as compared to the turnover for Year 2019 (approximately RMB3,540 million). The Group is expected to record a gross profit of approximately RMB510 million for Year 2020, representing a decrease of 24.3% as compared to the gross profit for Year 2019 (approximately RMB680 million);

• (b) as regards the Company's trade receivables for Year 2020, the three major telecommunications operators in China and China Tower Corporation Limited* (中國鐵 塔股份有限公司) accounted for 98.5% of the total trade receivables. The Company generally grants its customers a credit period ranging from 180 days to 360 days. In response to the Pandemic, the Company allows the three major telecommunications operators in China and China Tower Corporation Limited enjoy a more relaxed credit measure and has resulted in an increase in the balance and aging of trade receivables. Therefore, by application of HKFRS 9 in calculating the expected credit losses on trade receivables, the impairment losses under expected credit loss model net of reversal for Year 2020, based on the Group's preliminary assessment, was approximately RMB190 million, representing an increase of approximately RMB140 million as compared to the impairment losses under expected credit loss model net of reversal for Year 2019 (approximately RMB50 million); and

• (c) the Pandemic has adversely affected the global economic growth forecast, therefore the Group updated the forecast data to reflect the relevant impact when conducting asset valuation. Based on the preliminary assessment, the Group's management estimated that a impairment loss of the goodwill and intangible assets of approximately RMB250 million (Year 2019: Nil) should be made in Year 2020. As at 31 December 2020, the Group's goodwill and intangible assets were Nil and approximately RMB10 million respectively (as at 31 December 2019: approximately RMB160 million and approximately RMB130 million respectively), therefore the Group expected that there would be no significant impairment loss of goodwill or intangible assets in the future, and the amortisation of intangible assets would significantly decrease in the future.

The information contained in this announcement is only based on the preliminary assessment made by the Board with reference to the unaudited consolidated management accounts for Year 2020 and other information currently available and may be subject to adjustment or change. Shareholders and potential investors of the Company are advised to read the annual results of the Group which will be disclosed in the annual results announcement for 2020 to be published by the Company in late March 2021.

Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.

On behalf of the Board Trigiant Group Limited

Qian Lirong

Chairman

10 March 2021

As at the date of this announcement, the Board comprises the following members:

Executive directors:	Mr. Qian Lirong
(Chairman and Group chief executive officer)
Mr. Qian Chenhui
Non-executive director:	Mr. Xia Bin
Independent non-executive directors:	Professor Jin Xiaofeng
Mr. Chan Fan Shing
Mr. Chen Gang
Alternate director to Mr. Qian Lirong:	Ms. Qian Liqian
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