DIWANG IND H (01950) announced that on November 11, 2025 (after trading hours), the company (as the seller) entered into a second sale and purchase agreement with the buyer, BlueOcean Investment (Global) Ltd. Under the agreement, the buyer conditionally agreed to purchase a 24% stake in Darkblue Investment Ltd. for RMB29.86 million, payable in cash installments.

On December 27, 2024, the company (as the seller) had signed the first sale and purchase agreement with the buyer for the disposal of a 25% interest in the target company. As of the announcement date, the company holds a 75% stake in Darkblue Investment Ltd. Upon completion of the transaction, the company will retain a 51% stake, while the buyer will hold 49%. Consequently, Darkblue Investment Ltd. will remain a subsidiary of DIWANG IND H, and its financial results will continue to be consolidated into the group’s performance.

The total proceeds from the second disposal are expected to be RMB29.86 million, which will be used to repay group debt, invest in new potential business opportunities, and serve as general working capital or future funding needs for the business.

Mr. Cao, the ultimate beneficial owner of the buyer, has over 20 years of experience in the artificial leather industry and is currently engaged in foreign trade for artificial leather products. The board believes that the second disposal will (i) enhance the group’s sales as Mr. Cao will assist in developing sales and foreign trade markets for artificial leather, and (ii) provide an opportunity for the group to divest part of its stake in the target company, optimizing management and financial resources while maintaining existing operations and generating immediate cash inflow.

This transaction is expected to improve the group’s liquidity, increase working capital, and strengthen its overall financial position. Given the higher profitability of the liquor business in recent years, the group intends to allocate more resources to this segment. Additionally, the board is considering transitioning to a capital-light business model in the coming years by establishing a synthetic leather chemical trading operation within its manufacturing business.

The second disposal presents a valuable opportunity for the group to supplement working capital and focus on developing its synthetic leather chemical trading business.