HG Semiconductor Limited provided consolidated earnings guidance for the year ended December 31, 2023. For the year, the group expects to record a loss in the range of approximately RMB 155 million to RMB 164 million for the year, as compared to a net loss of approximately RMB 101 million for the year ended 31 December 2022. The Board considers that the expected increase in loss for the Year as compared to the loss for the Previous Year was primarily attributable to: (i) the impairment loss on intangible assets and property, plant and equipment being recognised for the Year respectively; and (ii) the loss arising from financial liabilities extinguished being recognised during the Year.

The loss arising from financial liabilities extinguished was derived from the difference between (a) the closing price of the shares of the Company as at the date of completion of the debt settlement agreement (Debt Settlement Agreement) dated 31 May 2023 and entered into between, among others, the Company and a creditor of the Group (Creditor) and (b) the issue price of the shares of the Company agreed to be allotted and issued by the Company to the Creditor pursuant to the Debt Settlement Agreement in full settlement of an indebted sum owed by the Group to the Creditor, details of which are set out in the circular of the Company dated 27 June 2023.