DIWANG IND H(01950) intends to sell a 24% stake in Darkblue Investment Ltd. for approximately 29.86 million yuan.

DIWANG IND H (01950) announced that on November 11, 2025 (after trading hours), the company (as the seller) entered into a second sale and purchase agreement with the buyer (BlueOcean Investment (Global) Ltd), under which the buyer conditionally agreed to purchase a 24% stake in the target company Darkblue Investment Ltd. for a purchase price of RMB 29.86 million to be paid in cash in installments. On December 27, 2024, the company (as the seller) had already entered into a first sale and purchase agreement with the buyer to sell a 25% stake in the target company. As of the date of this announcement, the company (as the seller) holds 75% of the issued shares of the target company. Upon completion, the target company will be owned 51% by the company and 49% by the buyer. Therefore, the target company will continue to be a subsidiary of the company after completion, and its financial performance will continue to be consolidated with the group's performance. The total proceeds from the expected second sale and purchase transaction amount to RMB 29.86 million, which will be used by the group to repay debts, invest in new potential business opportunities, and for general working capital purposes and future funding needs of its operations. Mr. Cao, the ultimate beneficial owner of the buyer, has over 20 years of experience in the artificial leather industry and is currently engaged in the foreign trade business of artificial leather. It is believed that the second sale and purchase agreement and the planned second sale and purchase transaction will (i) enhance the group's sales as Mr. Cao will assist in developing sales of artificial leather in the foreign trade market, and (ii) provide the group with opportunities to sell part of its equity interest in the target company to better utilize its management and financial resources, maintain its existing operations in various businesses, and bring immediate cash flow to the group. Thus, this will improve the group's liquidity, increase working capital, and strengthen its overall financial position. Given the recent high profitability of the liquor business, the group plans to allocate more resources to this business. Additionally, the board is considering transitioning to a light asset business structure in the next few years and establishing a synthetic leather chemical trade business in its manufacturing business. The second sale and purchase transaction will provide the group with additional working capital and valuable opportunities to focus on developing the synthetic leather chemical trade business.