Jianzhong Construction Development Limited provided earnings guidance for the year ended 31 December 2022. For the year, the company expects that the Group's net loss is in a range from RMB 200.0 million to RMB 250.0 million (2021: net loss of approximately RMB 94.0 million). The Board considers that the said expected net loss for the year was primarily attributable to: the recognition of impairment losses on property, plant and equipment: Due to the weak market sentiment of the real estate sector in the PRC, the Group assessed the recoverable amount of the property, plant and equipment, which mainly include machinery and equipment, as at 31 December 2022.

An impairment loss was recognised for the year ended 31 December 2022 to reduce the value of the property, plant and equipment to their recoverable amount, which was determined based on the discounted cash flow projection.; the decrease in revenue and gross profit from construction service: In view of the current economic condition, the primary focus of the Group is to improve liquidity position and to retain more cash to cope with the challenging operating environment. As a result, the Group has adopted a more prudent approach to tender for new construction projects, which led to a decline in revenue from construction service during the year ended 31 December 2022.; and the recognition of impairment losses on assets arising from contracts with customers: The Group decided to make additional impairment on the trade receivables, bills receivable and contract assets during the year ended 31 December 2022, to reflect the increased credit risk of the Group's debtors.