USPACE Technology Group Limited provided group earnings guidance for the financial year ended 31 December 2023. The Group is expected to record an estimated net loss of not less than RMB 218 million for the financial year ended 31 December 2023 as compared to a net loss of approximately RMB 154 million recorded for the financial year ended 31 December 2022. The increase in estimated net loss was mainly due to (i) the increase in depreciation expenses on right-of- use assets and management fee in the aerospace business, representing the lease for establishment of the Hong Kong satellite manufacturing centre and the Hong Kong satellite operation control and application centre at the Advanced Manufacturing Centre located at Tseung Kwan O Industrial Estate, Hong Kong; (ii) the increase in employee benefit expenses by reason of additional headcount to accommodate with the expected expansion of aerospace business; (iii) expenses related to the issuance of convertible notes; and (iv) impairment losses on certain properties, plant and equipment.

The Board wishes to inform the shareholders and investors of the Company that the depreciation, convertible notes related expenses and impairment losses are mainly due to accounting treatment and non-cash in nature. If these three items are not taken into account in both fiscal year 2023 and fiscal year 2022, it is expected that the Group would record a slight increase in loss of about 1.7% for the fiscal year 2023 as compared to the same period last year.