The board of directors of BabyTree Group announced that based on the information currently available to the Company and the preliminary review of the unaudited consolidated management accounts of the Group for the three months ended March 31, 2019, it is expected that the Group will record a loss for the six months ending June 30, 2019 as compared to an adjusted profit of RMB 122.3 million for the corresponding period in 2018. The adjustment was made by removing the effect of fair value change of financial liabilities at fair value through profit or loss, which is non-recurring in nature, from the net profit/(loss) for the period. The expected loss is primarily because (i) year-to-date advertising placement with major clients decreased compared to the corresponding period in 2018 as such major clients reduced their budgets in line with a decline in the macro-economic environment in China and the geopolitical uncertainty, (ii) for e-commerce business, system integration with Alibaba processed at a slower pace than expected and is still ongoing, (iii) year-to-date staff costs increased compared to the corresponding period in 2018 as increased the headcount of technical and product personnel for the continuing product upgradation and innovation and (iv) year-to-date marketing expenses increased compared to the corresponding period in 2018 as incurred more expenses in brand promotions and traffic direction in order to increase market share more efficiently.