Desun Real Estate Investment Services Group Co., Ltd. (“Desun Services”) has executed an Offset Agreement that exchanges overdue receivables for physical properties in the Desun Zhangtai Feili Tianxi Project, aiming to accelerate cash recovery and reduce credit-risk exposure.

The outstanding receivables originated from routine dealings between Desun Services’ subsidiary Chengdu Desun and project developer Rong He Real Estate. They comprise four main elements: 1) property-management fees on unsold units and parking spaces accrued after project delivery; 2) compensation payable by Rong He for owners’ fees arising from delivery delays; 3) labour costs incurred during the delay period; and 4) fees advanced by Rong He under a marketing promotion programme.

Persistent sector-wide liquidity pressure hindered Rong He’s ability to settle these amounts, prompting Desun Services to replace the unsecured receivables with tangible assets. By accepting completed residential properties (the “Properties”) in the same project, the group converts an uncertain cash claim into saleable assets, eliminating prolonged collection cycles and potential litigation costs.

Pricing of the Properties was agreed at a discount to prevailing market benchmarks. Desun Services referenced the project’s average listed price of approximately RMB13,900 per sq.m. in March 2026 and comparable completed transactions in identical building positions. The discounted acquisition cost enhances the group’s margin potential when the units are sold.

To monetise the Properties, Desun Services has commenced an active disposal strategy: • Listing the assets on public sales platforms; • Deploying a dedicated sales team of four to five experienced professionals; • Partnering with leading real-estate marketplace BEKE for broader buyer reach; and • Leveraging live-streaming virtual tours and online promotion tools.

The board, including independent non-executive directors, deems the Offset Agreement fair, reasonable and in the best interests of the company and its shareholders, notwithstanding that it falls outside the group’s ordinary course of business.