*St Gaosheng (000971): The Year-On-Year Profit In 2020 Will Be RMB 80-120 Million

* ST Gaosheng (000971. SZ) announced that the net profit attributable to shareholders of the listed company in 2020 is expected to be RMB 80 million-120 million, with a loss of 630.1819 million in the same period of last year; the net loss after deducting non recurring profit and loss is 62 million to 102 million yuan. The reasons for performance changes are as follows:

1. During the reporting period, according to the relevant requirements of accounting standards for business enterprises, the company conducted an impairment test on the goodwill and related long-term assets formed by the acquired subsidiaries. After the test, it is estimated that the provision for impairment is about 110 million yuan, which has an impact on the profit and loss in the reporting period. The amount of impairment withdrawn by the company is initially calculated by the Finance Department of the company, and will be finally determined after the evaluation and audit by the evaluation institution and accounting firm employed by the company.

2. During the reporting period, the overall impact of non recurring profit and loss on net profit is profit, which mainly includes: (1) during the reporting period, the company continued to accrue the estimated liabilities for the illegal joint loan and capital occupation part; for the illegal guarantee that the company has passed the judgment that the company will not bear relevant civil liability, the company has reversed the accrued estimated liabilities. The total impact of the two items on the profit and loss of the reporting period is about 210 million yuan. (2) The company's remaining small claims which fail to meet the disclosure standards will have a loss impact of about 10 million yuan on the profit and loss of the reporting period in 2020. (3) Shanghai yingyue Network Technology Co., Ltd., a wholly-owned subsidiary of the company, failed to meet the commitment made at the time of acquisition in 2019. The value of the shares to be compensated by the original shareholders of the company was affected by the change of stock price during the reporting period before the buyback of the company was completed, resulting in a loss of about 20 million yuan in the reporting period.

There are still some illegal guarantee cases of the company. The court of first instance ruled that the company does not bear the relevant civil liability. Due to the appeal of creditors or other guarantors, it is in the second instance stage, and the company has not yet offset the estimated liabilities. If the court maintains the original judgment in the second instance, the company will not bear the relevant civil liability, which will have a certain impact on the treatment of the estimated liabilities of this performance notice.