The Board of China Yurun Food Group Limited informed the shareholders and potential investors of the Company that, according to the preliminary review of the unaudited consolidated management accounts of the Group for the six months ended 30 June 2023 and other information currently available, the Group expects to record a loss of approximately HKD 39 million for the Review Period (same period of 2022: approximately HKD 16 million). Such substantial increase in loss was principally attributable to the sales channels in the relevant region did not expand as quickly as expected, resulting in a decline in slaughtering volume, which negatively affected the performance of relevant subsidiary of the Group engaging in the chilled and frozen pork segment. Accordingly, the Group reassessed the recoverable amount of property, plant and equipment and lease prepayment under this segment, and an impairment loss of approximately HKD 36 million was recognized for the Review Period.

The Company is still in the process of finalizing the financial statements for the Group for the Review Period. The information contained in this announcement is a preliminary assessment made by the Board based on the unaudited consolidated management accounts of the Group for the Review Period and information currently available to the Board which have not been audited or reviewed by the independent auditors of the Company or the audit committee of the Company.