Based on the information currently available to the board of directors of Huakang Biomedical Holdings Company Limited, including the preliminary review of the latest unaudited consolidated management accounts of the Group, the Board wishes to inform the shareholders of the Company (the "Shareholders") and potential investors that the Group is expected to record a loss attributable to owners of the Company of approximately RMB 4.2 million for the year ended 31 December 2021 (the "Current Year"), representing a significant decrease of approximately RMB 7.4 million comparing with approximately RMB 11.6 million for the year ended 31 December 2020 (the "Corresponding Year"). The Board believes that the estimated significant decrease in loss was mainly attributable to: a significant increase in the Group's gross profit of approximately RMB 1.7 million for the Current Year as compared to the Corresponding Year; recognition of equity-settled share option expenses of approximately RMB 2.7 million during the Corresponding Year, whereas no such expenses were incurred during the Current Year; recognition of provision for impairment losses on property, plant and equipment of approximately RMB 2.6 million during the Corresponding Year, whereas no such expenses were incurred during the Current Year; and a decrease in the net foreign exchange loss of approximately RMB 747,000 for the Current Year as compared to the Corresponding Year.