KWUNGS AROMA (01925) announced that on May 26, 2025, Kwung's Investments, a directly wholly-owned subsidiary of the company, as the buyer, entered into land sale agreements with certain sellers and Dragon, acting as the relevant sellers' agent. The agreements involve the acquisition of three land plots, all located in Thailand, referred to as Sale Land I, Sale Land II, and Sale Land III. The purchase prices are set at 56.214 million Thai Baht, 57.75 million Thai Baht, and 32.897 million Thai Baht, respectively. On March 4, 2026, Kwung's Investments entered into transfer agreements with Kwungs Thailand, an indirectly wholly-owned subsidiary of the company, for each of the land sale agreements. Consequently, the rights and obligations of Kwung's Investments under these agreements were transferred to Kwungs Thailand. As of the date of this announcement, Kwung's Investments has paid a total of 44.0583 million Thai Baht to the sellers as a booking fee.

On March 4, 2026, Kwungs Thailand was unable to complete the acquisition of the sale land plots as stipulated in the land sale agreements. This was due to Kwungs Thailand not having obtained the necessary investment promotion approval from the Thailand Board of Investment and the relevant governmental approvals for owning the land. Therefore, Kwungs Thailand entered into a memorandum with Mr. Thithinan, a shareholder holding a 50% interest in Dragon. According to the memorandum, (1) Mr. Thithinan will acquire the sale land plots and subsequently transfer them according to the instructions of Kwungs Thailand; (2) Kwungs Thailand will provide a loan to Mr. Thithinan, which will be secured by mortgages on Sale Land I and Sale Land II.

In response to global economic and geopolitical developments, the Group is actively expanding its overseas production capacity in addition to its production base in China. The Group is currently establishing new production facilities in Thailand, and the acquisition of these land plots is part of the process of building capacity in Thailand. Initially, the Group expected to acquire the land plots directly from the sellers through these land sale agreements. However, since the agreements were signed, the Group has been unsuccessful in obtaining the necessary approvals from the Thai government for Kwungs Thailand to own the land. The original final completion deadline under the land sale agreements was February 28, 2026, which was extended to March 4, 2026.

To avoid a scenario where the sellers decide to refuse further extensions of the final deadline and withdraw from the transaction, which would cause the Group to lose the opportunity to acquire the land and be unable to recover the paid booking fee, the Group engaged in discussions with Mr. Thithinan. Mr. Thithinan agreed to assist the Group by first acquiring the land plots himself and then transferring them to the Group after it obtains all necessary approvals. If the Group fails to obtain the necessary approvals, it has the right to exit the arrangement by instructing Mr. Thithinan to sell the land plots at a price determined solely at the Group's discretion, with the exception of Sale Land III.

Given that the total purchase price for Sale Land I and Sale Land II is 114 million Thai Baht, which matches the loan amount, the Directors believe the Group's risk exposure in this aspect is adequately covered. Furthermore, the loan to be provided to Mr. Thithinan will be secured by mortgages on Sale Land I and Sale Land II. Therefore, the Directors consider the credit risk associated with the loan to be low.