The board of directors of China ITS (Holdings) Co., Ltd. inform the shareholders of the company and potential investors that, based on the preliminary assessment of the group's unaudited consolidated management accounts, it is expected that, as compared to the net profit for the six months ended 30 June 2017, the group will incur a net loss for the six months ended 30 June 2018. The decline in financial results is mainly due to: (1) the delay of certain railway construction projects, resulting in a substantial decrease in the new contracts amounts, revenue and gross profit; (2) the adoption of IFRS 9 by the company from 1 January 2018 resulting that the changes in the available-for-sale equity investment held by the company (note: the available-for-sale equity investment represents the equity investment that has no significant impact on the investing company) measured at fair value will be included in the profit and loss of the period. As the indication of impairment of the fair value of the available-for-sale equity investment as at 30 June 2018 is evident, it is expected to result in significant impairment. The net loss of the Group is attributable to the two factors mentioned above.