Gran Haohai Biotechnology (06826.HK) announced on July 29th that for the six months ended June 30, 2022, the Group is expected to realize unaudited net profit of about RMB 65 million to RMB 78 million, a decrease of about RMB 166 million to RMB 153 million compared with the same period in 2021, a decrease of about 71.86% to 66.24%. The net profit of unaudited shareholders of listed companies after deducting non-recurring profits and losses is expected to be about 50 million yuan to 60 million yuan, a decrease of about 171 million yuan to 161 million yuan compared with the same period in 2021, or about 77.37% to 72.85%.

As far as the board of directors is aware, the main reasons for the decline in performance during the reporting period compared with the same period in 2021 are:

(1) since February 2022, Shanghai and its surrounding cities have experienced a severe epidemic of COVID-19, which has significantly affected the production of the company and its three subsidiaries in the Shanghai area. Until the epidemic slowed down in early June, Shanghai gradually lifted the global static management, and the company's production was gradually and fully restored. Although the group actively organizes production and delivery on the basis of epidemic prevention, minimizes the impact of the epidemic and strives to make up for it in June, the operating income of the company and its subsidiaries in Shanghai is still lower than that of the same period in 2021, resulting in a decline in gross profit and a shutdown loss of more than 90 million yuan.

(2) in the first half of 2021, the Group received dividends of about RMB 25690000 from Shenwu No.1 investment products, but the Group did not receive such dividends during the reporting period.

(3) during the reporting period, the distribution agreement between Aaren, the company's US subsidiary, and the former exclusive domestic distributor was terminated, the domestic sales channels of Arui brand IOL products produced by Aaren were faced with re-integration, and the management of the company thought that Aaren business showed signs of impairment and conducted an impairment test. According to the impairment test results, the total impairment loss on the goodwill and intangible assets of Aaren business is about RMB 25 million; and

(4) during the reporting period, due to the implementation of the equity incentive plan, the company and some subsidiaries paid a total of RMB 15 million for amortization of shares, which did not exist in the same period in 2021.