Dongyue Group Limited provided consolidated earnings guidance for the five months ended 31 May 2023. For the period, the group expects to record a significant decrease by approximately 83% in its net profit attributable to owners of the Company for the five months ended 31 May 2023, as compared with that for the corresponding period in 2022. Based on such information and after thorough consideration, the Board expects that the Group may record a significant decrease in its net profit attributable to owners of the Company for the six months ending 30 June 2023, as compared with that for the six months ended 30 June 2022.

During the five months ended 31 May 2023, the Group's business operations remained stable, where both its production capacity and sales volume have increased as compared to the corresponding period in 2022. The Group has been actively investing in research to develop new product applications, develop new markets and increase future development potential. Based on the analysis performed using information currently available, the Board considers that the aforementioned decrease in the Group's net profit attributable to owners of the Company for the five months ended 31 May 2023 was mainly attributable to the significant decrease in average market prices of some of the Group's major products during the five months ended 31 May 2023 as compared to the corresponding period in 2022, which led to the decrease in revenue of the Group during the same period; and the change in prices of raw material during the same period being unable to make up for the impact on net profit of the Group caused by the decline in market prices of products.

The proportionate decrease in cost of sales of the Group was lower than the decrease in revenue of the Group, leading to a decrease in profit margin.