DOWELL SERVICE (02352) intends to acquire all the shares of Chengdu Dong Yu Hong for 59.5 million yuan.

DOWELL SERVICE (02352) issued an announcement on November 20, 2024 (after trading hours) that its wholly-owned subsidiary Chongqing Dongyuan (as the buyer), Chengdu Dongyuan (as the seller), and the target company Chengdu Dongyu Hong have entered into an equity transfer agreement. Chongqing Dongyuan conditionally agrees to acquire and Chengdu Dongyuan conditionally agrees to sell all the shares of the target company for a price of 59.5 million yuan. The target company is mainly engaged in business management and real estate consulting. The target company holds approximately 83.48% ownership of the property. As of the date of this announcement, the total area of the property is approximately 8,474.10 square meters, and it is used as a nursing home. The target company currently rents the property to a subsidiary of the company for operating a nursing home. The group believes that continuing to use the property would be in its best interest, as relocating the nursing home property would incur additional expenses due to specific renovations and equipment required for operating such a nursing home; and relocating would take time and could potentially affect the operation of the group's nursing home, as elderly residents living in the nursing home would need to be transported to the relocated nursing home. In addition, if Chengdu Dongyuan were to sell the property to an independent third party, it could result in additional costs for the group (if the new owner increased the rent) or the group may need to find other properties to operate a nursing home in the future (if the new owner decided to lease the property to someone else). Therefore, acquiring the target company that owns the property at a fair market value ensures the long-term stability of the property's use and is in the best interest of the company. Additionally, as the property is located in a prime location in Chengdu and is considered a high-quality asset with long-term investment value, the directors also believe that the potential capital appreciation of the property will provide a return on investment for the group in the future.