The board of directors of Xiezhong International Holdings Limited announced that, based on a preliminary review of the unaudited financial information of the Group for the year ended 31 December 2017 and information currently available to the Board, the Group is expected to record a loss attributable to the equity shareholders of the company in the range of RMB 40.0 million to RMB 45.0 million for the year ended 31 December 2017. Based on information currently available to the Board, the expected loss for the year ended 31 December 2017 was mainly attributable to: the decrease in gross profit margin of the Group, which was due to the decrease in sales prices and changes in product structure resulting from changes in market demand; the increase in provision of doubtful debts brought by the credit risk originated from certain customers; the increase in bank loans which led to a significant increase in finance costs of the Group; and the increase in spending on research and development recorded in income statement.