Nanfang Communication Holdings Limited provided earnings guidance for the year ended 31 December 2021. The group is expected to record a net loss of approximately RMB 57.0 to 63.0 million for the year ended 31 December 2021, compared to the net loss of approximately RMB 19.2 million for the year ended 31 December 2020. The Board considered that the changes in the annual results for the year ended 31 December 2021 are primarily due to the following: an overall decrease in tender prices for optical fibre cables in the industry, which resulted in a drastic decrease in the prices of the tenders awarded, thereby leading to the decrease in the Group's revenue; apart from optical fibre, the costs of all other raw materials had increased, thus rendering the Group to record a relatively greater loss; and the Company has recorded a one-off equity-settled share-based payment expenses amounting to approximately RMB 14.9 million for the year ended 31 December 2021 as a result of the share options granted to eligible participants pursuant to the share option scheme on 27 May 2021.

The Company did not incur such expenses in the previous financial year.