China Risun Group Limited (Stock Code: 1907) announced that its wholly-owned subsidiary, Risun Group, has entered into an equity transfer agreement with Xuyang New Energy, an indirect wholly-owned subsidiary of Xuyang Holding. Under this agreement, Risun Group will sell its entire equity stake in Xingtai Risun Material New Technology Co., Ltd. for a consideration of RMB54,686,200, payable in cash by December 31, 2025.

Based on the announcement, Xuyang Holding is wholly owned by China Risun’s controlling shareholder, together with a director who also serves as the chairman and chief executive officer of China Risun. Consequently, the deal qualifies as a connected transaction under Chapter 14A of the Listing Rules. Since the highest applicable percentage ratio is above 0.1% but below 5%, the transaction will be subject to reporting and announcement requirements yet exempt from independent shareholders’ approval.

The target company, founded in November 2023 and holding a registered capital of RMB7 million, has not formally commenced substantive operations. Its audited net asset value stood at approximately RMB20.92 million as of August 31, 2025. China Risun expects to realize a gain of approximately RMB33.77 million from the sale, primarily due to the increase in the appraised value of certain land use rights acquired at an earlier date.

Following completion, the target company will cease to be a subsidiary of China Risun, and its financial results will no longer be consolidated into the group’s accounts. The proceeds from this transaction are intended for daily operating expenses. According to the announcement, China Risun believes that disposing of this non-profitable entity will unlock asset value, particularly related to land, thereby bringing added benefit to the group.