MAN SANG INT'L (00938) has entered into a conditional sale and purchase agreement. The agreement, dated March 12, 2026, involves the company as the seller, the buyer China JinNiu Group Limited, an acceptor note holder, and a guarantor. Under the terms of the agreement, the company has conditionally agreed to sell, and the buyer has conditionally agreed to acquire, the entire issued share capital of the target company, Decent Start Limited. Furthermore, the company has conditionally agreed to procure the transfer of a sales loan from the sales loan seller, a wholly-owned subsidiary of the company, which the buyer has conditionally agreed to accept. Upon completion of the transaction, the target company will cease to be a subsidiary of the group. Consequently, its financial performance, assets, and liabilities will no longer be consolidated into the group's financial statements. The consideration payable by the buyer to the company for the sale shares is HK$88.5 million. The consideration for the sales loan payable to the sales loan seller is HK$15.5 million. The total consideration amounts to HK$104 million. This total sum, comprising HK$88.5 million for the shares and HK$15.5 million for the loan, is to be settled in full by the buyer. The buyer is required to procure that the acceptor note holder offsets the outstanding principal amount of the unpaid acceptor notes against an amount equivalent to the consideration due at completion. These outstanding acceptor notes will subsequently be cancelled. The primary asset of the disposal group is the Hokkaido Hotel, located in Yoichi-cho, Hokkaido, Japan. The operations of the Hokkaido Hotel have been significantly impacted by rising operational costs, including labor shortages and increased wages. Intensifying competition from both local and international operators has further pressured the hotel's performance. The proceeds from the sale will be used to offset an equivalent amount of the outstanding acceptor notes. Following the completion of the disposal, the principal amount of the outstanding acceptor notes will be reduced to approximately HK$446 million. The board of directors believes that the proposed disposal will alleviate the substantial liquidity pressure associated with meeting the company's financial obligations, improve its overall financial health, and enhance the group's gearing ratio.