Man Sang International Ltd. (00938) has signed a conditional Sale and Purchase Agreement to divest 100% of Decent Start Ltd.—its wholly owned subsidiary holding a hotel and golf course in Yoichi, Hokkaido—and to assign an intra-group loan of HK$15.50 million. The aggregate consideration totals HK$104.00 million and will be settled through a set-off against the outstanding principal of promissory notes held by Total Idea International Ltd., an entity wholly owned by Chairman and controlling shareholder Mr. Hu Xingrong. Interest accrued on the relevant portion of these notes from 12 April 2025 to completion will be waived.

Upon completion, the target company will cease to be consolidated, and the promissory note balance will fall to approximately HK$446 million. Management estimates a disposal gain of about HK$64.90 million, calculated against unaudited net assets of HK$14.40 million, the HK$15.50 million loan, and a HK$9.20 million exchange-reserve reversal.

The disposal is considered a Major Disposal under Chapter 14 of the Listing Rules (percentage ratio above 25% but below 75%) and a Connected Transaction under Chapter 14A, as the purchaser, China JinNiu Group Ltd., is wholly owned by Mr. Hu. Independent Shareholders’ approval is required; Mr. Hu and his associates will abstain from voting at the forthcoming special general meeting (SGM).

Financial data for the disposal group show revenue of HK$9.53 million and HK$7.45 million for FY 2024 and FY 2025, respectively, with a narrowed net loss after tax of HK$5.61 million in FY 2025. The six months ended 30 September 2025 recorded HK$5.53 million in revenue and a small net profit of HK$0.03 million.

The HK$88.50 million equity consideration represents a premium to an indicative independent valuation of the Hokkaido Hotel of JPY 760.5 million (approximately HK$37.90 million as of 28 February 2026). The board cites persistent operational losses, rising cost pressures, and stronger competition as reasons for exiting, positioning the transaction to ease liquidity stress and improve gearing.

Completion is conditional on regulatory approvals and Independent Shareholders’ consent before the long-stop date of 30 September 2026. A circular containing an independent valuation, the Independent Board Committee’s view, and the Independent Financial Adviser’s opinion is scheduled for dispatch on or before 2 April 2026. Shareholders and investors are advised to exercise caution until conditions are met.