JY GRANDMARK (02231) has announced that on April 14, 2026, the seller, an indirect wholly-owned subsidiary of the company, intends to transfer 100% of the equity in the target company to the buyer. Following the completion of the transaction, the target company will cease to be a subsidiary. Consequently, the financial results, assets, and liabilities of the target group will no longer be consolidated into the group's financial statements. The target company and its subsidiaries primarily engage in property management services. The decision to divest is driven by four key considerations: cash preservation and realization, strategic focus, compliance and risk mitigation, and capital optimization, all of which are particularly relevant during this period of significant industry adjustment. The group anticipates achieving the following objectives through this disposal: (i) Divesting underperforming assets: Despite ongoing efforts to improve operations, the target group's property management business has consistently delivered poor financial performance due to rising labor costs, government-guided fee levels, and declining collection rates. Several projects within the target group have continued to generate losses. As of December 31, 2025, the target group reported a net liability of approximately RMB 6.56 million, representing a financial burden. Current market conditions present an opportunity for the group to prioritize the monetization of the target group to enhance liquidity and alleviate short-term funding pressures. (ii) Resolving receivables and bad debt risks: Financial difficulties faced by some property developers have created impairment risks for property management receivables. The disposal allows the group to eliminate these credit risks in a single transaction, preventing ongoing adverse effects on its financial performance. (iii) Focusing on core business and adapting to industry transformation: By optimizing its business portfolio through the divestiture, the group can strengthen strategic focus on its core property development operations while reducing the integration complexities and ongoing operational and management costs associated with the property management segment.