China Success Finance Group Holdings Limited provided earnings guidance for the six months ended 30 June 2022. For the period, the group is expected to record a net loss of approximately RMB 65.3 million for the Reporting Period (Six months ended 30 June 2021 ("6M2021"): net profit of approximately RMB5.0 million). The main reasons for the Group to record a net loss for the Reporting Period are as follows: 1. The Group faced changes in macro economic and market conditions, decrease in overall guaranteed rates in the market and increased competition in guarantee business which led to a decrease in the yield of the Group's guarantee business during the Reporting Period; 2. The Group faced decrease in guarantee income recognized during the Reporting Period from deferred revenue of previous years as a result of gradual maturity of existing guarantee business; and 3. The Group recorded provision for impairment losses of approximately RMB58.6 million for the Reporting Period (6M2021: reversal of provision for impairment losses of approximately RMB5.1 million).

During the Reporting Period, as default risks in the real estate-related industries of Mainland China continued to ferment, upstream and downstream industries of real estate industries such as the construction industry, were affected and faced increased default risks. The loans of customers in the construction industry from banks and financial institutions faced increased risk of becoming overdue or were overdue. In addition, due to the rising delinquency rate of loans from banks and financial institutions and the uncertainty of the Chinese economy in the Reporting Period, the Group impaired its financial assets in accordance with applicable accounting policies.

The impairment provision is non-cash in nature and therefore has no impact on the Group's operating cash flows. The Group actively explores new businesses and investments to generate value for its shareholders in a long term and sustainable manner. The Group has invested in livestock farming business and the construction of modern hog farm in the Greater Bay Area which the Group has invested in has been completed and put into production.

The Group's livestock farming business has gradually transitioned from the hog fostering model in 2021 to the self-breeding and self-raising model. Since April 2022, the first batch of over 10,000 self-bred and self-raised commercial hogs have been slaughtered and sales of live hogs under such model began to record sales revenue in the second quarter of 2022. However, in light of multiple pressures such as cyclical fluctuations in hog prices and rising feeding costs due to rising prices in global feeding raw materials, revenue from live hog sales during the Reporting Period fell short of expectations.

The Group expects that, with the support of national policy, the continuous recovery of live hog production on a national scale and the gradual recovery in cyclical prices of hogs in the second half of 2022, live hog sales revenue of the Group will achieve accelerated growth in the second half of 2022.