Performance Forecast of Hainan Ruize in 2022

2023, Hainan Ruize New Building Materials Co., Ltd. issued a performance forecast for 2022.

The report shows that the net profit of Hainan Ruize is expected to be negative during the reporting period, with a net profit loss of 360 million yuan to 540 million yuan attributable to shareholders of listed companies, and a net profit loss of 590 million yuan to 770 million yuan after deducting non-recurring gains and losses.

Hainan Ruize analyzed the reasons for the results of this performance forecast:

1. During the reporting period, due to the repeated epidemics and the continuous adverse impact of real estate regulation policies, the investment in engineering projects decreased and the commencement of projects was delayed, resulting in a decrease in the operating income of the company's commercial concrete, cement sales and landscaping projects.

2. During the reporting period, the operating revenue of the municipal environmental sanitation segment of the Company decreased and the financial expenses increased. Meanwhile, as the payment collection fell short of expectations, the provision for credit impairment losses increased and the operating profit declined. At the end of the reporting period, the Company made a preliminary assessment and calculation of the goodwill formed by the acquisition of Guangdong Lurun Environmental Technology Co., Ltd. based on the judgment of the development of the industry and the operation of the acquired enterprise, and found that there were signs of impairment of the goodwill formed by the acquisition of Guangdong Lurun Environmental Technology Co., Ltd. It is expected that the impairment of goodwill will be accrued in 2022 (the final amount of impairment will be determined after the assessment and audit by the assessment institution and the audit institution).

3. The Company's project settlement and payment collection fell short of expectations, resulting in an increase in the provision for impairment losses of accounts receivable and contract assets.

4. During the reporting period, the Company transferred 85% of the equity of Zhaoqing Jingang Cement Co., Ltd., a wholly-owned subsidiary, and the equity of Xinjiang Coal Trading Center Co., Ltd., a joint venture, resulting in investment income.