Zixin Group Holdings Limited provided earnings guidance for the financial year ended 31 March 2023. For the year, the company expected to report a net loss after tax attributable to owners of the Company. The Chinese government had previously implemented a "zero-COVID" policy since early 2020 to control the outbreak of COVID-19.

The policy mandated strict measures including but not limited to controlling human traffic in each city to reduce the flow and concentration of people, and issuing directives mandating the temporary closure of business operations of all enterprises, including the Group's subsidiaries in China. This "zero-COVID" policy resulted in disruptions across the supply chain, spurring inflationary pressure on raw materials and logistics which have had an adverse impact on the Group's financial performance in FY2023. While there was a sudden shift away from the "zero-COVID" policy in December 2022, such a sudden shift led to a surge of COVID-19 infections starting from mid-December 2022.

This resulted in a substantial number of the Group's employees being infected in December 2022 and January 2023, thereby causing a temporary cessation of the Group's operations in China, and the Group's employees only returned to work in February 2023 after the Chinese New Year festive holidays. In this regard, the unaudited financial results for FY2023 show that sales had declined significantly for the second half of FY2023, particularly from December 2022 to March 2023, where harvests of the sweet potatoes from the farmlands could not be carried out as the farmers of the Group's contracted farmlands had been infected with COVID-19, as well as the temporary cessation of its snack food manufacturing operations. This led to the lack of supply of fresh sweet potatoes, as well as snack food products for sales which adversely affected the Group's gross profit and gross margin, and resulted in a decline in the Group's financial performance for FY2023.