Shandong Molong Petroleum Machinery Company Limited provided group earnings guidance for the full year ended December 31, 2019. The board of directors of the company update the shareholders of the company and potential investors that based on its latest preliminary assessment of the Group's currently available unaudited management accounts, it believes that the Group may record a net loss attributable to shareholders of the Company in the amount of approximately RMB 170 to RMB 210 million for the year ended 31 December 2019, as compared to the net profit attributable to shareholders of the company in the amount of RMB 92.5 million for the year ended 31 December 2018. On preliminary estimation made by the Company based on the currently available unaudited management accounts for the year ended 31 December 2019, the turnaround from a profit for the year ended 2018 to a loss in for the year ended 2019 is mainly attributable to: the significant increase in the price of raw materials during 2019, which in turn resulted in a significant increase in production costs. At the same time, there has been a decrease in the price of the products of the Company, which in turn resulted in a decrease in profit; there has been an increase in inspection and maintenance costs as a result of the suspension of production for inspection and maintenance and partial technical modification of production facilities of Shouguang Maolong New Materials Technology Development Company Limited, a wholly owned subsidiary of the company, which has resulted in a limited supply of raw materials to the downstream subsidiaries and thus increased the product costs; in light of litigations brought by investors, the provisions for loss resulting from claims of investors in 2019 is estimated to be a total of RMB 29 million; and the company has conducted preliminary tests on impairment of goodwill and the estimated provision for impairment of goodwill is in the amount of RMB 23 million. The company is still in the process of conducting relevant tests on impairment of goodwill and the final amount of provision will be confirmed by a valuation and audit institution qualified in the securities and future practice.