The board of directors of Forgame Holdings Limited announced that based on the preliminary assessment of the group's unaudited consolidated management accounts for the six months ended 30 June 2014, it is expected that the group may record a net loss of approximately RMB 15 million to RMB 25 million for the first six months of 2014. The expected net loss is primarily due to the following factors: substantial decrease in revenue due to: decrease in revenue of the group's existing webgames as they reached mature stages of their product life cycles; and delay in launching new webgames due to the Group's strategic decision to invest additional development time and resources to enhance the quality of its webgames. As a result, the group has not launched key new webgame titles during the first six months of 2014; and a significant part of the group's cost base is related to employee expenses in maintaining its research, development, publishing and operating capabilities for both mobile and webgame business, and such expenses are not directly linked with revenue.

Therefore, despite the decline in revenue, the group's total cost base has remained relatively stable for the period.