Shandong Chenming Paper Holdings (“Chenming Paper”) has agreed to sell its 90.05% holding in Shandong Yujing Grand Hotel (“Yujing Hotel”)—together with shareholder loans—to Shouguang Cultural Tourism Investment and Development Group for RMB316.67 million in cash. The Equity and Debt Transfer Agreement was signed on 12 June 2026 by Chenming Paper’s wholly owned subsidiary, Shandong Chenming Paper Sales.

The consideration covers RMB117.16 million for equity and RMB199.51 million for outstanding shareholder loans. Payment is due within 90 days of the agreement’s effective date, with completion tied to the transfer of the equity registration to the buyer. A refund clause allows the purchaser to withdraw if the registration is not finalised by 31 December 2026.

Independent valuer Tinho International appraised Yujing Hotel’s entire equity at RMB130.11 million as of 31 March 2026, using an asset-based approach. Despite audited net liabilities of RMB80.22 million and consecutive net losses of RMB16.28 million in 2024 and RMB19.53 million in 2025, the valuation reflected a 262.21% uplift over book value due to significant revaluation of fixed and intangible assets.

Chenming Paper expects to record an estimated disposal gain of approximately RMB191 million, calculated as the consideration minus the carrying amounts of the transferred equity and shareholder loans as of 31 May 2026. Post-completion, Yujing Hotel will cease to be consolidated into the Group’s financial statements.

Proceeds will be directed toward working-capital needs and debt reduction, aligning with management’s strategy to streamline the business and concentrate resources on core pulp and paper operations.

Under Hong Kong Listing Rules, the transaction qualifies as a discloseable transaction, with the highest applicable percentage ratio exceeding 5% but below 25%. Consequently, it requires publication of this announcement but does not need shareholder approval.