The board of directors (the "Board") of the Jiangnan Group Limited informed the shareholders of the company and potential investors that, based on the preliminary assessment of the Group's unaudited consolidated management accounts for the year ended 31 December 2020, the Group's profit for the year ended 31 December 2020 is expected to decrease by approximately 55%, as compared with that for the year ended 31 December 2019 in the amount of approximately RMB 383,223,000. The expected decrease in the Group's profit for the year ended 31 December 2020 is mainly attributable to the decrease in turnover for the year under review as compared with that for the year ended 31 December 2019 of approximately RMB 14,524,221,000 due to the reduced demand for the Group's products during the year under review, as a result of the adverse economic impacts of the COVID-19 pandemic; the increase in selling and distribution costs for the year under review as compared with those for the year ended 31 December 2019 of approximately RMB 429,575,000, which is mainly due to the increase in the costs incurred in providing better technical support and after-sale services to the Group's customers; and the increase in the costs incurred in bidding projects for the Group; the increase in administrative expenses for the year under review as compared with those for the year ended 31 December 2019 of approximately RMB 265,540,000, which is mainly due to the increase in the staff costs and general expenses incurred by the Group for the enhancement of its business and employee health management; and the turning of an exchange gain for the year ended 31 December 2019 of approximately RMB 9,302,000 to an exchange loss for the year under review, all partially offset by the increase in other income for the year under review as compared with that for the year ended 31 December 2019 of approximately RMB95,245,000, primarily attributable to the combined effect of the recovery of a bad debt which has been written off last year and the decrease in the interest income earned on bank deposits, as a result of the decline in the average balance of the bank deposits placed by the Group during the year under review; the reduction in share of losses from associates for the year under review, which amounted to approximately RMB 10,608,000 for the year ended 31 December 2019; the reduction in impairment losses under the expected credit loss model, net of reversal for the year under review, which amounted to approximately RMB 101,996,000 for the year ended 31 December 2019, mainly due to the amounts and the aging of the Group's trade and other receivables over one year remaining stable during the year under review; the reduction in finance costs for the year under review as compared with those for the year ended 31 December 2019 of approximately RMB 292,766,000, mainly attributable to the Group requiring less financing to fund its working capital in the year under review due to the reduction in the demand for its products; and the decrease in taxation for the year under review as compared with that for the year ended 31 December 2019 of approximately RMB 76,652,000, as a result of the reduction in the Group's taxable profit for the year under review.