Phancy Group Co., Ltd. (Phancy) has entered a multi-pronged alliance with Hong Kong-listed Huanxi Media Group Limited (Huanxi Media), combining Phancy’s artificial intelligence capabilities with Huanxi Media’s film-and-television portfolio.

Strategic cooperation and joint venture • On 19 May 2026, the two companies signed a framework agreement to establish a joint venture that will leverage Phancy’s AI expertise and Huanxi Media’s content assets. • Planned collaboration areas include data sharing for AI model training, development of large language models and AI agents tailored to film, TV, gaming and IP-related derivatives, and joint creation of content and entertainment products. • Over the first three years, Huanxi Media targets token-based usage of Phancy’s Large Model API services worth no less than US$200.00 million.

First Large Model API Services Framework Agreement • A separate two-year agreement commits Huanxi Media to prepay US$20.00 million (approximately HK$157.00 million) for Large Model API usage provided by Phancy’s wholly owned subsidiary, Phancy International Limited. • Future procurement contracts may be negotiated as token consumption and business needs evolve.

Equity investment in Huanxi Media • Phancy International will subscribe for 731.29 million new Huanxi Media shares at HK$0.275 each, totalling HK$201.10 million (about US$25.63 million). • Post-subscription, Phancy International will hold roughly 14.30 % of Huanxi Media’s enlarged share capital, positioning the Group for deeper “AI + content” collaboration across data co-construction, model R&D and resource linkage. • All percentage ratios under Hong Kong Listing Rules fall below 5 %; therefore, the transaction is not classified as a notifiable transaction for Phancy.

Strategic rationale The agreements aim to integrate advanced AI technologies into Huanxi Media’s production workflows while expanding Phancy’s presence in the cultural and entertainment sectors, potentially unlocking US$200.00 million in service revenue over three years and securing an equity foothold in a major media partner.