SHENGHUI CLEAN (02521) announced that on November 18, 2025 (after trading hours), Guangzhou Shenghui (an indirect wholly-owned subsidiary of the company) entered into a non-legally binding letter of intent with the target company, Haohuo (Chongqing) Network Technology Co., Ltd., regarding a potential capital injection.

Under the letter of intent, Guangzhou Shenghui intends to subscribe for new equity in the target company via a cash injection. Upon completion of the potential capital injection, Guangzhou Shenghui will hold no less than 51% of the target company’s shares. Guangzhou Shenghui has agreed to pay a refundable deposit of RMB 9 million to the target company.

If the letter of intent is terminated by mutual agreement or if the parties fail to execute a formal capital injection agreement within 60 days after the deposit payment, the refundable deposit will be fully returned to Guangzhou Shenghui within three business days. Should the target company fail to comply, it will be liable to pay Guangzhou Shenghui a penalty at a daily interest rate of 0.05% on the outstanding amount.

The target company, incorporated in Chongqing, primarily provides software solutions leveraging AI and cloud technologies to assist small and medium-sized enterprises in human resource allocation, training, administrative, and legal management.

The board believes that the potential capital injection (if finalized) presents a strategic opportunity for the group to diversify revenue streams, integrate technology into daily operations to reduce costs, optimize resource allocation, and create synergies with existing businesses.

For instance, the group mainly provides cleaning and maintenance services, which are labor-intensive, face high employee turnover, and are constrained by factors such as working hours, location, gender, and age. By adopting AI-driven algorithms developed by the target company, the platform can train new employees and allocate full-time or part-time workers to labor-demanding positions. This approach is expected to optimize internal and external resources, significantly reduce labor costs, and drive the group’s AI-powered digital transformation and long-term growth.