HC Group Inc. provided unaudited earnings guidance for the six months ended 30 June 2023. For the period, the company expects loss attributable to equity holders of the Company in a range from approximately RMB700 million to RMB900 million for the six months ended 30 June 2023 (the "Relevant Period"). For the corresponding period in 2022, the Group recorded an unaudited loss attributable to equity holders of the Company of approximately RMB74.7 million.

Based on the information currently available, the loss for the Relevant Period was mainly attributable to the combined effect of the following: The Group's technology-driven new retail segment, which mainly generate its revenue through the operation of the ZOL.com.cn website, did not achieve the expected results. ZOL has been focusing on the provision of online advertising and marketing services for 3C and living technology products in mainland China. As stated in the Company's 2022 annual report, there are significant changes in user habits in recent years.

Despite various measures implemented by the Group's management to transform the ZOL's business model, ZOL faced difficulties in capitalising the opportunities arising from the recovery of economics following the release of various restrictions after the pandemic and in expanding its user base, which significantly impacted ZOL's business. The online advertising market has not resumed after the pandemic as expected in the Relevant Period. In light of the financial and business outlook of ZOL and the lack of certainty of ZOL's business to turn around in the foreseeable future, it is expected the valuation of the equity interest of ZOL as a whole will further decline and there will be impairment for the goodwill relating to this segment; and Impairment loss on financial assets, arising from certain significant overdue loans in the Relevant Period from the ordinary and usual course in the Group's micro-credit loan business under its platform and corporate services segment, is expected to be made for the Relevant Period.