NANFANG COMM (01617) announced that on February 13, 2026, its indirectly wholly-owned subsidiary signed a construction contract with contractor Jiangsu Xinxia Construction Co., Ltd. The agreement covers construction engineering and labor services for a specific project, with a total contract value of RMB 38.25 million.

According to the project's construction schedule, NANFANG COMM will pay approximately RMB 2.1 million in infrastructure supporting fees levied by the Wujin District Housing and Urban-Rural Development Bureau for the project by the end of February 2026.

The project involves the construction and development of an industrial park, including the renovation and reconstruction of the company's former factory premises. The contractor's responsibilities under the agreement include providing construction engineering services for the industrial park, as well as supplying building materials and labor.

The board of directors believes the project aligns with the group's long-term development goals and business strategy. From operational and management perspectives, consolidating production capacity currently spread across two factory sites into one location will enable economies of scale and intensive production. Procurement, logistics, and management costs are expected to decrease due to scale effects, while allowing management teams to operate more centrally. This consolidation is anticipated to enhance production efficiency and flexibility, preparing the group for future large-scale, intensive manufacturing.

Furthermore, this initiative presents an opportunity for the group to reduce overall operating costs and generate new cash flows. Transforming the land of the old factory into a modern industrial park will significantly reduce maintenance expenses associated with outdated equipment and facilities. The group will also consider leasing and/or selling portions of the property within the industrial park, thereby creating new revenue streams.

The board views this project as a significant opportunity to enhance the group's corporate image and achieve continued breakthroughs in its business strategy. The project is expected to attract elite and high-quality talent to join the group, supporting business expansion efforts.