PAGODA GP (02411) announced that on February 2, 2026, the company entered into a capital increase agreement. According to the agreement, Mr. Tian Xiqiu and Mr. Lai Xianyang agreed to contribute cash of RMB 660,000 and RMB 300,000, respectively, to the registered capital of Pagoda Commercial Management at a price of RMB 1.0 per share.

Following the capital injection, Mr. Tian Xiqiu and Mr. Lai Xianyang will hold approximately 33.67% and 15.31% equity stakes, respectively, in Pagoda Commercial Management. The company's shareholding in Pagoda Commercial Management will be diluted from 100% to 51.02%, yet it will remain a subsidiary of the company, and its financial results will continue to be consolidated into the company's financial statements.

On the same day, the company (as the lender) entered into (i) Supplemental Agreement I with Pagoda Commercial Management (for itself and on behalf of its subsidiaries, as the borrower), whereby the company and Pagoda Commercial Management mutually agreed that a loan with a total principal amount of RMB 180 million under Loan Agreement I would be converted into an interest-bearing loan. The term is from the effective date of Supplemental Agreement I until March 31, 2029, with interest accruing from its effective date at an annual rate equivalent to the one-year Loan Prime Rate (LPR) of 3.0% published by the People's Bank of China on January 20, 2026, plus 20 basis points; and (ii) Loan Agreement II, whereby the company conditionally agreed to provide Pagoda Commercial Management with a loan with a maximum principal amount of RMB 70 million. The term is from the effective date of Loan Agreement II until March 31, 2029, with interest accruing from the relevant drawdown date of each loan at an annual rate equivalent to the one-year LPR of 3.0% published by the People's Bank of China on January 20, 2026, plus 20 basis points.

While implementing its new business plan and expanding into new business segments, the company recognized that Pagoda Commercial Management requires additional resources to sustain its business activities, including high-quality suppliers, franchisees, professional management personnel, and capital.

After careful consideration and taking into account their personal willingness, the company noted that (i) Executive Director Mr. Tian Xiqiu possesses extensive resources in the snack supply chain and networks of suppliers and franchisees, coupled with rich experience in establishing and optimizing supply chain systems to ensure the stability and cost-effectiveness of new businesses, which can provide strong support for the future development of Pagoda Commercial Management; and (ii) the company's Deputy General Manager and Chief Financial Officer, Mr. Lai Xianyang, has accumulated substantial investor resources and management experience through his past work history.

Mr. Tian Xiqiu, a director of Pagoda Commercial Management, expressed his willingness to oversee the development of the group's fruit and snack businesses, as well as the operations of Pagoda Commercial Management. Mr. Lai Xianyang also expressed his willingness to assume responsibility for supervising the group's snack business, particularly focusing on market expansion, supply chain optimization, and operational management, and to be responsible for the overall development of Pagoda Commercial Management.

To facilitate the development of the group's new business segments and tightly align this development with the resources possessed by the management responsible for Pagoda Commercial Management, the company agreed to allow Mr. Tian Xiqiu and Mr. Lai Xianyang to make additional capital contributions to Pagoda Commercial Management as investors and become its shareholders, thereby jointly sharing the risks and rewards brought by the group's new business segments.