Deyun Holding Ltd. provided group earnings guidance for the six months ended June 30, 2022. For the period, the company's Group expects that its net profit will decrease by not less than 65% from approximately RMB 19.9 million for the six months ended June 30, 2021. The Board believes that the decline in the Group's results is mainly due to, among other things: a new wave of COVID-19 occurred in the People's Republic of China (the "PRC") during the six months ended 30 June 2022.

In response to the COVID-19 pandemic, the PRC government had to implement lockdown measures, which caused disruptions to the supply chain and business activities of many PRC enterprises including the Group and its business partners; revenue from the Group's lace manufacturing and dyeing services for the six months ended 30 June 2022 is expected to decrease by approximately 45% to 50% as compared with the six months ended 30 June 2021 which was mainly due to the disruption to the supply chain and business activities of the Group in the PRC, caused by the lockdown measures in response to the outbreak of novel coronavirus; and the Group's gross profit margin for the six months ended 30 June 2022 is also expected to decrease substantially because of the drop in revenue contributed by the Group's lace manufacturing and dyeing services while cost of sales are mostly fixed and did not decrease in line with revenue.