EPS HEALTH TECH (03860) announced that on February 12, 2026, the company, as the buyer, entered into an agreement with the seller. Under the agreement, the company conditionally agreed to purchase, and the seller conditionally agreed to sell, 1,623 ordinary shares of China Gene, representing 16.23% of its issued share capital, for a total cash consideration of HK$43 million. Following the completion of the acquisition, the group's investment in China Gene will be recognized as an investment in an associate in its consolidated financial statements.

As of the date of this announcement, China Gene beneficially holds approximately 67.68% of the equity in HuaXin. HuaXin, the primary operating subsidiary of China Gene, is a company incorporated in China and is primarily engaged in the internal research and development, production, and sales of biopharmaceutical products. Its products focus on the fields of gynecological biopharmaceuticals and gene cell therapy, involving the application of interferons and interleukins. In recent years, the China Gene Group has focused on producing and selling "Xin Fu Ning," which has become a drug of choice for gynecologists. The main business of the China Gene Group complements the group's existing operations in healthcare product trading, medical device leasing, and the provision of professional contract research organization (CRO) services.

The Board of Directors believes the acquisition presents an excellent opportunity for the group to participate in the business operations of the China Gene Group. This is particularly relevant given the favorable outlook for China's healthcare and biopharmaceutical industry, under which the China Gene Group's business is continuously developing, profitable, and has strong growth prospects. The acquisition will also allow for further exploration of potential business collaboration between the group and the China Gene Group. Specifically, the group could leverage its extensive sales network from its healthcare product trading business to assist in distributing the China Gene Group's listed biopharmaceutical products on a fee basis, thereby increasing the group's revenue. The complementary strengths of the China Gene Group may create synergies with the group's Healthcare Product (HCP) business and CRO business through an integrated value chain within the healthcare and biopharmaceutical ecosystem. This chain spans from supplying and leasing laboratory consumables and R&D equipment, to providing research support via CRO services, and finally to the sales and distribution of biopharmaceutical products.

The Board considers the acquisition a strategic investment that will enable the group to expand its market participation in China's healthcare and biopharmaceutical sector. This move aligns with the group's business strategy, has the potential to create long-term value, and facilitates the group's development within the promising healthcare industry. Following the acquisition's completion, China Gene will adopt a dividend policy. Under this policy, after making all necessary, reasonable, and prudent provisions and reserves for taxes, repayment of company borrowings (if any), and the company's working capital and cash flow requirements, China Gene aims to distribute at least one-third of its annual profit after tax as dividends. The Board believes that, considering China Gene's profit record over the past three fiscal years and its dividend policy, the investment is expected to yield positive financial returns for the group and provide good business opportunities for its future development.

In light of the potential business synergies with the China Gene Group through the integrated value chain; the view that the acquisition is a strategic investment opportunity to expand market participation; and China Gene Group's profit record and dividend policy, bolstered by the excellent opportunities arising from the positive development prospects of China's healthcare and biopharmaceutical industry—all of which are expected to positively contribute to the group's overall financial performance and long-term development post-completion—the Board (excluding the independent non-executive directors, who will provide their opinion after considering the advice of the independent financial adviser) deems that the agreement and the terms of the contemplated transactions are entered into on normal commercial terms, are fair and reasonable, and are in the overall interests of the company and its shareholders. As of the date of this announcement, the group has no current plans or intentions to make further acquisitions of equity in the China Gene Group in the foreseeable future.