Sihuan Pharmaceutical Holdings Group Ltd. provided earnings guidance for the six months ended June 30, 2019. The board of directors of Sihuan Pharmaceutical Holdings Group Ltd. based on a preliminary review and analysis of the latest unaudited consolidated management accounts of the Group for the six months ended 30 June 2019, the Group is expected to record a net loss for the Period, mainly attributable to a possible impairment loss on goodwill of approximately RMB 2.84 billion, primarily arising from business combination of certain subsidiaries acquired in previous years. The possible impairment is based on an assessment of the possible impact on prescription and procurement patterns after the promulgation of the National Catalog of the First Batch of Drugs under Close Monitoring of Rational Drug Use (for Chemical Medicines and Biological Products) in July 2019. The Board would like to emphasize that the Group expects to record a net profit for the Period before the recognition of the impairment loss on goodwill. This impairment loss on goodwill is a non-cash item and a one-off item charged to the consolidated statement of profit and loss which did not and will not have impact on the Group’s daily operations and cash flow.