Citychamp Watch & Jewellery Group Limited (CITYCHAMP) announced a discloseable transaction under HKEX Chapter 14 rules, selling 50% of its wholly-owned subsidiary Rotary Watch & Jewellery Limited (“Disposal Company”) to Peers Hardy (UK) Limited for a total maximum consideration of £7.00 million (HK$73.36 million).

The deal was executed on 20 May 2026 via a Share Purchase Agreement (SPA) between CITYCHAMP’s unit International Volant Limited (Vendor) and Peers Hardy (Purchaser). Completion occurred on the same day, reducing the Vendor’s stake in the Disposal Company from 100% to 50%. As a result, the entity is de-consolidated from CITYCHAMP’s accounts and will be accounted for as a joint venture going forward.

Payment structure • Initial Consideration: £1.20 million payable at completion. • Deferred Consideration: £4.80 million, with £1.20 million due on 1 Aug 2026, another £1.20 million on 1 Nov 2026, and £0.15 million quarterly from 1 Jan 2027 to 1 Oct 2030. • Additional (earn-out) Consideration: up to £1.00 million, calculated at the higher of 5 % of annual net income from Rotary-branded products or £0.50 million during the earn-out period commencing five years after completion.

Key commercial arrangements • Concurrent assignments transfer the “Rotary” trademarks from group subsidiaries Rotary Watches Ltd (UK) and Fabrique De Montres Rotary SA (Switzerland) to the Disposal Company. • A Shareholders’ Agreement caps the Disposal Company’s activities at owning and licensing the trademarks; operational manufacturing and distribution remain with the Purchaser. • Governance: a four-member board—two directors each from Vendor and Purchaser, falling to one Vendor representative if its stake drops to 25 % or below.

Drag-Along / Tag-Along mechanics Under the new Articles, if a third-party offer of at least £12.00 million for 100 % of the Disposal Company is received without unanimous board approval, the Purchaser can compel the Vendor to sell a further 25% stake (25 shares) for up to £3.00 million (“Drag Along Option”). Conversely, if the Purchaser sells its stake, it must offer to acquire half of the Vendor’s residual holding (25 shares) for £3.00 million (tag-along right).

Financial impact and use of proceeds CITYCHAMP expects to record a gain of no less than £5.00 million (HK$52.40 million) from the transaction. Net proceeds will be used to replenish general working capital. The sale aligns with the group’s strategy to focus resources on its core Asian watch brands—Rossini, EBOHR and Ernest Borel—after cumulative five-year losses of approximately £0.88 million at its Dreyfuss Group operations, which include Rotary.

Regulatory classification Aggregating the SPA and Drag Along Option, the transaction exceeds 5 % but remains below 25 % of the applicable percentage ratios under HKEX Listing Rule 14.22. It is therefore classified as a discloseable transaction, requiring announcement but not shareholder approval.

Counterparties • Vendor: International Volant Limited, a wholly-owned subsidiary of CITYCHAMP. • Purchaser: Peers Hardy (UK) Limited, 68.9 % owned by Mr. John Story, and independent of CITYCHAMP.

CITYCHAMP’s board, including independent non-executive directors, considers the transaction terms fair, reasonable and in the interests of shareholders.