CG SERVICES (06098) attached to the full provision of impairment allowances amounting to around 800 million to 1.1 billion yuan.

CG SERVICES (06098) announces that, based on a recent review of the financial condition of the Group, the Board of Directors (the Board) hereby notifies the shareholders and potential investors of the Company that, based on the unaudited consolidated financial statements of the Group for the twelve months ended December 31, 2024, the Company has conducted an impairment test on goodwill in accordance with Hong Kong Financial Reporting Standards. As a result of the impairment test, the Company intends to make a provision for impairment (impairment of goodwill and other intangible assets) of approximately RMB 800 million to RMB 1.1 billion for certain assets showing impairment indicators, namely the Company's non-wholly owned subsidiary COUNTRY GARDEN Full Country Environmental Technology Group Limited (Full Country). The above events are mainly due to the fact that Full Country's expansion business in previous years did not progress as expected, some existing businesses were adjusted, resulting in a decrease in revenue and profit, and a longer cash collection cycle for some of Full Country's customers leading to unsatisfactory cash flow. The impairment of goodwill and other intangible assets is a non-cash item and will not have an impact on the Group's cash flow, operations, or working capital. Based on the management accounts, the Company preliminarily estimates that the net cash flow from operating activities will be approximately RMB 3.3 billion to RMB 4.3 billion. In addition, based on the management accounts, the cash outflow from financing activities, including amounts used for dividend payments to the Company's shareholders, dividend payments to non-controlling interests, and purchases of shares under the Company's new share incentive scheme, totals approximately RMB 1.7 billion. However, based on the management accounts, the Company expects that this impairment of goodwill and other intangible assets will result in a decrease in the Group's net profit for the financial year ending December 31, 2024, by approximately RMB 800 million to RMB 1.1 billion. This impairment, however, will not be included in the calculation of the Company's attributable core net profit.