ROYALE HOME (01198) intends to list 25% equity stake in Eastern Malaysia for sale.

ROYALE HOME (01198) announced that its subsidiary, Royal Estates (an indirect wholly-owned subsidiary of the company), intends to publicly list and sell a 25% equity interest in Dongma in the Guangdong United Equity Trading Center. The public listing announcement for the sale is expected to be released on February 20, 2025. The minimum listing price for Dongma equity is RMB 60 million. The announcement stated that in order to optimize resources and streamline the group's asset structure, they plan to sell the equity interest in Dongma. Dongma's performance has not met the company's expectations, leading to a significant deterioration in its financial condition and profitability. The valuation of Dongma has greatly decreased compared to the initial investment made by the company in 2020, and there have been significant changes in the overall industry environment and market trends. As disclosed in the group's 2023 annual report and 2024 interim report, there is significant uncertainty regarding the group's net liabilities and net losses, which may raise significant questions about the group's ability to continue operating. In an effort to alleviate liquidity pressure and improve the group's financial situation, the group is actively seeking opportunities to sell some of its equity interests to increase its liquidity levels. The potential sale (if executed) will provide the company with cash inflow, helping to ease the group's liquidity and cash flow constraints. The potential sale will also allow the group to focus on developing its core business, promoting the overall development of the company.