Based on the currently available information, the board of directors of Nanfang Communication Holdings Limited informed the shareholders of the Company and potential investors that the Group is expected to record a profit and total comprehensive income of no less than approximately RMB 2.0 million for the six months ended 30 June 2023 as compared with the loss and total comprehensive expense of approximately RMB 19.6 million for the six months ended 30 June 2022. The Board considered that the improvement in the interim results for the six months ended 30 June 2023 is primarily due to the following: a decrease in the costs of raw materials which led to a decrease in the cost of sales thus drove the gross profit and the gross profit margin up; and an increase in net foreign exchange gains due to the appreciation of financial assets denominated in foreign currency.