Shares of PHANCY Group Co Ltd experienced a significant intraday decline, plummeting 5.18% on Wednesday. The sharp drop followed the company's announcement of a major strategic cooperation agreement.

The movement comes after PHANCY disclosed it had entered a strategic cooperation and joint venture framework agreement with Huanxi Media Group. As part of the deal, a PHANCY unit agreed to subscribe for 731.3 million Huanxi Media shares at HK$0.275 per share, building a 14% stake. The collaboration will focus on data cooperation and the joint exploration of large model technologies in film and television production. PHANCY also entered a large model API services framework agreement with Huanxi Media, valued at $20 million over two years, with target service fees to PHANCY expected to be no less than $200 million within three years.

Market reaction to the announcement appears negative, with reports indicating PHANCY shares fell in pre-market trading following the news. The agreement requires Huanxi Media to prepay for AI tokens, which may have raised investor concerns about the deal's structure or its perceived value to PHANCY shareholders.