The board of directors of Yangzhou Guangling District Taihe Rural Micro-finance Company Limited informed the shareholders of the Company and potential investors that based on the information currently available to the management of the Company and a preliminary review and assessment of the latest unaudited consolidated management accounts of the Group for the year ended 31 December 2021 (the "Management Accounts"), the Group is expected to record a profit after tax ranging from approximately RMB3 million to RMB5 million for the year ended
31 December 2021, representing a decrease of approximately 86% to 92% as compared to the profit after tax of approximately RMB36.7 million for the year ended 31 December 2020. The decrease in profit was primarily attributable to the impact of the COVID-19 pandemic on the local economy in the second half of 2021, which impacted the real estate and construction industries and resulted in an increase
in default of repayment of loans by the Company's customers. As such, the Group strengthened provisions for impairment losses on loans according to economic trends and enhanced the write-off of non-performing loans.