GCL New Energy Holdings Limited provided preliminary consolidated earnings guidance for the year ended December 31, 2021. For the year, the company expects net loss will decrease by more than 50% as compared to the net loss of approximately RMB 1,218 million for the year ended 31 December 2020. The substantive decrease in net loss was mainly attributable to (i) a decrease in one- off impairment losses for the solar power plants and certain receivables recorded in 2020 and (ii) a decrease in finance costs as a result of repayment of debts.

However, the decrease in net loss was partly offset by scaling down of their solar power plants business. In order to reduce their financial risks, the Group adopted an asset-light business model by disposing certain solar power plants assets. During 2021, the Group entered into agreements to dispose solar power plants with a total capacity of approximately 2.9GW.

Together with the disposal agreements that were entered into in the preceding financial year, a total of approximately 4GW of solar power plants disposal was completed during FY2021. As a result of the disposals, the aggregate installed capacity decreased from approximately 5 GW as at 31 December 2020 to approximately 1 GW as at 31 December 2021, which has affected the Group's overall profitability deriving from the solar power plants operations.