Jiu Rong Holdings (2358.HK) Sells Five Panel Display Production Lines for RMB6.05M

Jiu Rong Holdings Limited (2358.HK) announced on June 25, 2026, that the Board hereby announces that on June 25, 2026 (after trading hours), the Company's indirect wholly-owned subsidiary Zhejiang Jiurong Intelligent Technology Co., Ltd. (the "Seller") entered into an asset transaction contract (the "Agreement") with Guangzhou Yingfu Technology Co., Ltd. (the "Buyer"), whereby the Seller agreed to sell and the Buyer agreed to purchase five panel display intelligent production lines and a batch of related production line auxiliary equipment and testing equipment (collectively, the "Assets"), for a total consideration of RMB6,050,000 (inclusive of tax) (the "Disposal"). The transaction was conducted through the online trading platform of Hangzhou Property Exchange Co., Ltd. via public listing procedures.

The Buyer is required to pay the total consideration in cash in a lump sum within five working days from the date of signing the Agreement to the designated settlement account of Hangzhou Property Exchange. In addition, the Buyer must pay Hangzhou Property Exchange a transaction service fee equivalent to 4% of the consideration, as well as a performance bond of RMB435,000 for the production lines and RMB170,000 for the auxiliary equipment; the performance bonds will be fully refunded to the Buyer upon completion.

The five panel display intelligent production lines are currently mortgaged to Xihu Electronics Group Co., Ltd. (a shareholder of Shuyuan Technology Co., Ltd.) as security for a loan; Shuyuan Technology Co., Ltd. is a shareholder of the Company. The auxiliary equipment for the production lines is currently pledged to Shuyuan Technology Innovation Development Co., Ltd. (a wholly-owned subsidiary of Shuyuan Technology Co., Ltd.). Upon receipt of the full asset transfer price from the Buyer (excluding transaction taxes), the respective mortgagees and pledgees will actively cooperate to handle the procedures for releasing the mortgage and pledge.

The Seller and Buyer must complete the handover procedures for the Assets after the Buyer has paid the full consideration, performance bonds and transaction service fees. After the handover procedures are completed, the Buyer is responsible for completing the dismantling and removal of the five panel display intelligent production lines, auxiliary equipment and testing equipment as soon as possible. The Disposal is expected to be completed before early July 2026.

As of December 31, 2025, the unaudited net book value of the Assets was approximately RMB2,109,000, including approximately RMB1,695,000 for the five production lines and approximately RMB414,000 for auxiliary and testing equipment. Upon final audit, the Group is estimated to record a gain from the Disposal (before tax and transaction expenses) of approximately RMB3,941,000, being the difference between the total consideration of RMB6,050,000 and the net book value of the Assets of approximately RMB2,109,000. The net proceeds from the Disposal of RMB5,353,983 (after deducting taxes of approximately RMB696,017) will be mainly used to repay the outstanding loans secured by the above mortgage and pledge.

The Seller is a company incorporated in the PRC and an indirect wholly-owned subsidiary of the Group, principally engaged in digital video-related businesses. The Buyer is a company incorporated in the PRC, principally engaged in technology promotion and application services. After making all reasonable enquiries, the directors are satisfied that the Buyer and its ultimate beneficial owners are independent third parties.

As one or more of the applicable percentage ratios for the Disposal exceed 5% but are below 25%, the Disposal constitutes a discloseable transaction under Chapter 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, and is therefore subject to the reporting and announcement requirements but exempt from the shareholders' approval requirement.

As disclosed in the Company's interim report for the six months ended December 31, 2025, the Group's digital video business faces intensified industry competition and economic uncertainty, prompting the Group to implement cost-saving measures, including closing its internal production facilities and shifting to a light-asset operating model. The sale of idle production lines and related auxiliary equipment is consistent with this strategic adjustment. The Board believes that the Disposal will enable the Group to realize the residual value of its idle manufacturing assets, reduce maintenance and storage costs, lower liabilities and alleviate liquidity pressure. The directors believe that the terms of the Agreement (including the price determined through the public trading platform) were entered into on normal commercial terms, are fair and reasonable, and are in the best interests of the Company and its shareholders as a whole.

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