The board of directors of Zhonghua Gas Holdings Limited announced that based on the information currently available to the Board and the preliminary review of the relevant unaudited consolidated management accounts of the Group for the six months ended 30 June 2022 (the ``2022 Interim''), the Group is expected to record a significant reduction in net loss after tax by 78.0% from approximately RMB 123.6 million for the corresponding period in 2021 to approximately RMB 27.2 million for the 2022 Interim. Such decrease was mainly attributable to a decrease in allowance for impairment of trade receivables from approximately RMB 126.9 million for the corresponding period in 2021 to approximately RMB 11.0 million for the 2022 Interim, which was due to no significant increase in overdue trade receivables balance as at 30 June 2022 when compared to as at 31 December 2021; and that the decrease in net loss was offset by a fair value losses of convertible bonds of approximately RMB 5.2 million for the 2022 Interim (corresponding period in 2021: fair value gains of approximately RMB 8.8 million). On the other hand, revenue of the 2022 Interim was decreased by 47.5% when compared to corresponding period in 2021 (from approximately RMB 216.8 million to approximately RMB 113.8 million), and such decrease was due to the outbreak of novel coronavirus pandemic (``COVID-19'') in some locations in the PRC in the first half of 2022, which led to a decrease in sales in certain liquefied natural gas (LNG) supply location.

In addition, gross loss of approximately RMB 4.3 million (a gross loss margin of 3.8%) was recorded for the 2022 Interim (corresponding period in 2021: gross loss of approximately RMB 3.9 million (a gross loss margin of 1.8%)) which due to the intense price competition and price fluctuation of LNG led to a thin margin and that could not cover the fixed cost.