DONGFENG GROUP (00489) and offeror Dongfeng Motor Group (Wuhan) Investment Co., Ltd. jointly announced that on August 22, 2025, the offeror and the company entered into a proposed transaction comprising: (1) Distribution and introduction listing: The company has resolved to distribute its Lanchang shares to existing shareholders, and Lanchang will apply for H-share introduction listing on the condition that distribution requirements are met; and (2) Merger: Simultaneously, the offeror and the company entered into a merger agreement, under which and subject to the conditions and terms of the merger agreement (including merger prerequisites and merger conditions), the offeror and the company agree to implement a merger with all H-share shareholders (except H-shares directly held by Dongfeng Company) through cash consideration. Upon fulfillment of merger prerequisites and all merger effective conditions, the company will apply to the Stock Exchange for voluntary withdrawal of H-share listing status. The completion of distribution, introduction listing, and merger are mutually prerequisite, and distribution, introduction listing, and merger will occur on the same day or consecutively.

Under the proposed transaction, H-share shareholders will receive 0.3552608 Lanchang H-shares for each H-share held on the distribution record date through distribution and introduction listing. Additionally, H-share shareholders (except H-shares directly held by Dongfeng Company) will receive HK$6.68 in cash as the cancellation price per H-share. Based on the valuation consultant's estimate using the valuation reference exchange rate, the median of Lanchang H-share valuation range as of July 31, 2025, is HK$11.735 per share. The theoretical value of 0.3552608 Lanchang H-shares obtained through distribution and introduction listing per H-share in the proposed transaction is approximately HK$4.17. Combined with the cancellation price, the total theoretical value per H-share under the proposed transaction is approximately HK$10.85, representing a premium of about 128.90% over the closing price of HK$4.74 per H-share on the last undisturbed trading day on the Stock Exchange.

The proposed transaction aims to create value for company shareholders by (i) allowing shareholders to directly hold Lanchang shares that the company will hold and achieving primary listing of Lanchang H-shares on the Main Board of the Stock Exchange; and (ii) privatizing the company holding remaining businesses (which will ultimately be absorbed and merged by the offeror), eliminating the historical holding company discount under the existing controlling structure. Through the merger, Dongfeng Company and the offeror plan to further integrate quality resources toward emerging industries and achieve valuation reconstruction. Through Lanchang Auto's distribution and listing, Dongfeng Company will focus on developing the new energy vehicle industry and promoting the transformation and upgrade from fuel vehicles to new energy vehicles.

Against the backdrop of rapid development in the global new energy vehicle market, Lanchang Auto's introduction listing platform will (i) broaden financing channels, (ii) enhance brand image, (iii) expand overseas business layout, and (iv) further improve corporate governance. Additionally, the company has applied to the Stock Exchange for approval to resume trading of H-shares from 9:00 AM on Monday, August 25, 2025.

As of the date of this joint announcement, the offeror is wholly owned by Dongfeng Company, which is directly supervised by the State-owned Assets Supervision and Administration Commission of the State Council of China. Dongfeng Company is primarily engaged in the manufacturing and supply of commercial vehicles, passenger vehicles, electric vehicles, and supporting services and products.