Guangdong Tannery Limited provided earnings guidance for the six months ended June 30, 2022. For the period, the company's unaudited consolidated net loss is expected to record approximately HKD 18 million to approximately HKD 21 million as compared with the unaudited consolidated net loss of approximately HKD 4 million in the corresponding period of 2021. The expected increase in the consolidated net loss was mainly due to the following factors: The drop in sales from approximately HKD 112 million to approximately HKD 43 million resulting from the weak demand in footwear leather market and the increase in unit cost of cowhides, the gross losses have been incurred.

Due to epidemic prevention and control in Suining County, Xuzhou, Jiangsu Province, in which the Company operates its main factory, the production operation had been suspended for weeks, resulting in decline in delivery of inventory.