The board of directors of Honghua Group Limited provided that based on the unaudited consolidated management accounts of the Company and its subsidiaries (the "Group") for the six months ended 30 June 2021 and the information currently available to the Company, the Group is expected to record net loss attributable to the shareholders of the Company ranging from RMB 30.00 million to RMB 70.00 million for the six months ended 30 June 2021, as compared to profit attributable to the shareholders of RMB 31.16 million for the six months ended 30 June 2020. The expected net loss for the six months ended 30 June 2021 is primarily due to the combined impact of the COVID-19 pandemic and the fluctuation in the international oil price. Major international oil companies made huge cuts in their capital expenditure. The exports of petroleum equipment (especially drilling rigs) of the Group which had advantages traditionally bore the brunt in terms of number of orders, and thus the operating revenue still recorded a year-on-year decrease despite proactive adjustment to the business structure during the year.