Forgame Holdings Limited informed the shareholders and potential investors of the Company that based on the preliminary information available to the Board, the Group is expected to record an impairment on the goodwill and identifiable intangible assets arising from the equity acquisition of the Jianlicai Group in an after tax amount of RMB 320.5 million in the 2018 interim results announcement and 2018 the interim report of the Company.

As the changes in industry and the regulatory adjustments both occurred in late July, the management of the Group was not able to take such changes and adjustments into account nor include such factors in its projection at the time of preparing the May Positive Profit Alert Announcement. Due to the Impairment, it is expected that the upcoming interim results of the Group will not be within the scope of the expected results disclosed in the May Positive Profit Alert Announcement. Based on preliminary information available to the Board, the Group is expected to record a net loss between approximately RMB 285.5 million and RMB 295.5 million for the six months ending 30 June 2018, as compared to a net loss of approximately RMB 17.7 million for the corresponding period in 2017. If the impact of the Impairment is excluded, the Group's business operation for the first half year of 2018 was stable and its financial performance would have been in line with the Group's expectation of a net profit ranging from approximately RMB 25.0 million to RMB 35.0 million as disclosed in the May Positive Profit Alert Announcement.