The board of directors of Shenwan Hongyuan (H.K.) Limited announced that, based on the latest financial information available to the Board, the unaudited consolidated loss after tax of the Group for the six months ended 30 June 2022 is expected to be between HKD 120 million and HKD 125 million as compared with a consolidated profit after tax of HKD 53.67 million for the six months ended 30 June 2021. Due to certain adverse factors, such as the repeated coronavirus (COVID) epidemics, the geopolitical tension and tightening global monetary policy as a result of hikes in the federal funds rate, which caused a bleak investment sentiment and sluggish market conditions in Hong Kong's capital market in the first half of 2022, fee income, commission income and interest income have decreased. Further, due to the uncertainties of bond market, there was an increase in the expected credit loss provision of fixed income products in institutional services and trading business.

The expected credit loss provision is not a realized loss. The business of the Group operates as usual and the overall financial, business and operating positions of the Group remains sound.