China Water Industry Group Limited provided unaudited consolidated financial guidance of the Group for the year ended 31 December 2022. It is expected that the Group may record an unaudited consolidated net loss not more than HKD 35.00 million for the FY2022 as compared to the audited consolidated net profit of approximately HKD 25.55 million for the year ended 31 December 2021, and accordingly there may be a net loss not more than HKD 95.00 million attributable to owners of the Company as compared to that of net loss of approximately HKD 44.02 million attributable to owners of the Company in the FY2021. Comparing with the FY2021, the Board considered that the expected downturn from profit to loss was mainly attributable to, among others, net impact of the following factors: the absence of contribution from Yingtan Water Group upon the completion of disposal in 2021; the decrease in gross profit derived from the renewable energy business as a result of the decline in the volume of on-grid electricity and suspension of production at one of the natural gas plants; the depreciation of Renminbi which attributable to an exchange loss in the FY2022; the absence of net gain on financial assets at fair value through profit and loss in the FY2022 as compared to the FY2021 and the increase in the provision of expected credit loss on account receivables.

The effects of the aforesaid facts were partially offset by the reduction in provision of impairment loss on assets relating to several renewable energy projects; income from the sale of China Certified Emission Reduction credits; profit recognized from the sale of completed properties in Nanjing Space Big Data Industry Base Project upon the properties delivery to customers in second half of 2022; and the decrease in administrative expenses.