Vixtel Technologies Holdings Limited provided consolidated earnings guidance for the year ended December 31, 2022. Based on a preliminary review of the Group's unaudited consolidated management accounts for the year ended 31 December 2022 (the "Year") and information currently available to the Board, the Group is expected to record a net loss attributable to the owners of the parent company in the range of approximately RMB 12.0 million to RMB 14.0 million for the Year as compared to the net profit attributable to the owners of the parent company of approximately RMB 3.6 million for the year ended 31 December 2021. Such expected net loss attributable to the owners of the parent company for the Year is mainly attributable to the following reasons: the Group continued to increase its headcount in product and service divisions as well as in research and development division during the Year in order to improve its competitiveness in 5G related business; the Group also increased its headcount in administration division during the Year for the need of further business developments; and the Group recorded an increase in cost of sales which in turn resulted in a decrease in gross profit.

The increase in cost of sales for the Year was a result of the recurrent outbreak of COVID-19, in particular, delivering integrated APM system solutions and providing technical services required more staff to participate and longer time to complete the projects under stringent COVID-19 anti-epidemic controls in the People's Republic of China during the Year.