Red Star Macalline Group Corporation Ltd. provided unaudited consolidated earnings guidance for the six months ended 30 June 2024. For the six months, the Group for 1H2024 is expected to range between approximately RMB1,150 million to RMB 1,560 million, representing a turnaround from profits to losses, as compared to the net profit of RMB 113.449 million recorded by the Group for the six months ended 30 June 2023 . The net loss attributable to the owners of the Company for 1H2024 is expected to range between RMB1,090 million to RMB1,470 million, representing a turnaround from profits to losses, as compared to the net profit attributable to the owners of the Company of RMB 128.196 million recorded by the Group for 1H2023.

The aforesaid losses were mainly due to the fact that the home furnishing materials industry is faced with the dual pressure of demand contraction and supply shock under the effect of the fluctuations in the domestic economic environment, and the shrinking of real estate industry has further resulted in low demand in the home furnishing retail market. Despite the gradual recovery of consumption demand, resident consumption level and consumer confidence have not yet fully recovered, and the economic situation still faces a number of challenges. The occupancy rate of the shopping malls declined in stages as compared with the previous year due to the slow recovery of consumption in the post real estate cycle and the accelerated real estate industry clearance.

In the current uncertain market environment, as a leading enterprise in the home improvement and furnishing retail industry, the Company has proactively fulfilled its social responsibility by reducing or waiving part of the rent and management fees for qualified tenants to support the production and development of various SMEs that have already settled in the shopping malls. At the same time, the Company proactively embraced the changes in the new consumption behavior patterns, adjusted its strategic direction and the layout of categories in the shopping malls to attract quality categories such as designers, home decoration companies and new energy automobiles to settle in the shopping malls with favourable commercial terms. In the initial stage of attracting investment and attracting brands to its shopping malls, the Company provided favourable commercial terms in respect of rents and management fees on a temporary basis, which led to a phased decline in the Company's income from rental and management fees. Therefore, the valuation of investment properties for 1H2024 was adjusted downward by more than RMB 800 million accordingly.