Narnia (Hong Kong) Group Company Limited provided earnings guidance for the six months ended June 30, 2022. For the period, the company expected to record a decrease in the profit attributable to the equity holders of the Company by approximately 55% to 60% for the Period, as compared to the profit attributable to the equity holders of the Company of approximately RMB 4.3 million recorded for the six months ended June 30, 2021. Based on the information currently available, the expected decrease in the profit attributable to the equity holders of the Company was mainly attributable to a decrease in the overall gross profit margin of the sales and services of the Group for the Period as compared to the Previous Period.

Such decrease in the overall gross profit margin of the sales and services of the Group was mainly attributable to the increase in the average cost of the raw materials and energy prices during the Period, which led to a relatively higher cost of sales and services for the Period. Besides, due to the keen competition in the market, the Group needed to offer more competitive selling price in order to gain more sales orders.