YGM TRADING (00375) announced that on September 1, 2025, the sellers (YGM Limited and Yampa Investments Limited) and debt sellers entered into a sale and purchase agreement with the buyer (Shinmei Trading) for the sale of all issued shares of YGM Retail and the transfer of shareholder loans due by YGM Retail, with a total consideration of HK$34.32 million.

Upon completion of the disposal, YGM Retail and YGM Marketing will enter into a distribution and manufacturing licensing agreement. YGM Retail will grant YGM Marketing exclusive rights to market, distribute and sell products in Hong Kong and Macau, non-exclusive rights to manufacture products globally, and non-exclusive license to use Ashworth IP in manufacturing, promoting, marketing, distributing and selling products in Hong Kong and Macau for a three-year period from the completion date.

Royalties receivable from franchisees involve minimum royalty amounts and additional royalties calculated based on recorded sales/purchase amounts as applicable. Except for one franchisee in 2023, due to weak global retail environment, all franchisees have only paid minimum royalty amounts under their respective agreements. Based on historical records, there remains uncertainty regarding the licensee's performance during the remaining term of the licensing agreement and the possibility of renewal upon expiration.

Given this situation and considering YGM Retail's small losses, the board believes that the current disposal of trademarks represents a timely decision to monetize its investment in Ashworth intellectual property. Following completion of the disposal, the Group's traditional business (including the Ashworth brand) will be concentrated in Hong Kong and Macau, covering garment manufacturing, wholesale, retail, sales and marketing operations. As for the Ashworth brand, it will be operated under the franchise granted by YGM Retail to YGM Marketing, a wholly-owned subsidiary of the Company, pursuant to the DML Agreement.