Gelonghui August 14th 丨Hongcheng Environmental Technology (02265.HK) announced that it expects to record a profit of about RMB 10.5 million during the period due to company owners in the six months ending June 30, 2023, a decrease of about 76.6% from the profit recorded by company owners of about RMB 44.9 million during the same period in 2022. It is expected that the six months ending June 30, 2023 will record revenue of approximately RMB 49.2 million, down about 57.1% from the revenue recorded in the same period in 2022 of approximately RMB 114.6 million.

The board believes that the main reason for the decline in profits and earnings during the period due to the company's owners is: (i) In order to enrich the product portfolio and expand current business, the Group plans to start production of the sulfuric acid production line in the third quarter of 2023. Since sulfur concentrate is the main raw material in sulfuric acid production, the Group has reserved sufficient sulfur concentrate as raw material for the commissioning of sulfuric acid production lines; (ii) the decline in manufacturing processes that require sulfur concentrate as the main raw material has led to a decline in the sales volume and unit price of sulfur concentrate; and (iii) revenue from hazardous waste treatment services in gold ore has declined compared to the same period last year due to a decrease in the amount of cyanide tailings provided by upstream customers.