SC HOLDINGS (00413) announced on December 24, 2025, that its indirect wholly-owned subsidiary, Everlasting Toys (Dongguan) Co., Ltd. (the Seller), entered into a sale and purchase agreement with Dongguan Yanyuan Supply Chain Management Co., Ltd. (the Buyer). The Seller agreed to sell, and the Buyer agreed to purchase, the sale assets for a total consideration of RMB 290 million (approximately HKD 318.7 million).

The land in question is an industrial plot spanning approximately 200 mu, located in Xieken Management Area and Erkeng Village, Qingxi Town, Dongguan City, Guangdong Province, China. Prior to the sale, the land use rights were held by the Seller as part of the sale assets.

The decision to sell stems from a significant decline in demand for the Seller's products in the U.S. due to consumer complaints and safety claims, coupled with ongoing U.S.-China trade tensions, including tariff impacts. As a result, the Seller experienced a sharp reduction in purchase orders for specific toy products from clients in 2025. Given that high operational and labor costs could no longer be offset by revenue from these orders, retaining the assets would not generate profits for the Group.

This move represents a strategic decision by the Company to conserve resources and enhance production flexibility. Should client orders rebound, the Company may lease back the factory buildings from the Buyer or rent alternative facilities to resume toy production.

Additionally, the sale is expected to generate a gain of approximately HKD 260.9 million, improving the Group's liquidity and financial position.

After evaluating the preliminary assessment of the sale assets' value, the Board deemed the transaction terms fair, reasonable, and in the best interests of the Company and its shareholders. No Director has a material interest in the sale, and none abstained from voting on the Board's resolution regarding the transaction.