The board of directors of Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Limited announced that, solely based on the information currently available and a preliminary review of the group's unaudited consolidated management accounts for the year ended December 31, 2014 by the group's management, it is expected that the group may record a consolidated net loss for the year ended December 31, 2014 as compared to the consolidated net profit of RMB 41.4 million recorded for the year ended December 31, 2013. It is mainly attributable to (i) a change of the product mix that led to a decline in gross profit ratio; (ii) a decrease in fair value gains on the group's investment properties; (iii) a decrease in government subsidies granted in relation to awarding the group for its investment in Lianyungang; and (iv) increases in administrative expenses and finance costs that caused by the expansion of the Group's Zhuhai and Lianyungang production bases. It is considered that the enlarged expenditures can enhance the strength and expand the business of the group and maximize the return to shareholders.