Zhengye International Holdings Company Limited provided earnings guidance for the six months ended 30 June 2023. For the period, the company is expected to record approximately RMB 15 million to RMB 20 million, as compared to the profit attributable to equity holders of the Company of RMB 41.94 million for the six months ended 30 June 2022 (the "Corresponding Period Last Year"). The loss attributable to equity holders of the Company was mainly due to (i) the continuous decrease in the product price in the paper and paper-based products industry as a result of the effect brought by the slowdown in global economy and the continuous weakening of consumer sentiment in domestic market and consumption demand.

During the first half of 2023, the sales revenue of the Group decreasd significantly by over 25% as compared with the Corresponding Period Last Year; (ii) the significant decrease in the price of the Group's paper manufacturing products as a result of the effect brought by the serious imbalance between supply and demand while the decrease in the price of waste paper as raw materials failing to offset the decrease in the price of finished products. Moreover, the gross profit margin of the Group's paper manufacturing business decreased significantly by over 5% year-on-year due to high energy costs. The paper manufacturing sector recorded an operating loss for the first time.