POWERLONG (01238) intends to sell 100% equity of Hangzhou Huazhan Real Estate Development Co., Ltd.

POWERLONG (01238) announced that on December 23, 2025, the group entered into a cooperation agreement with Lian Shang Yi Hao, Lishui Lian Jia, and Tianjin Yuanjian. Shanghai Rui Long (an indirect wholly-owned subsidiary of the company) has conditionally agreed to sell, and Lian Shang Yi Hao has conditionally agreed to purchase 100% of the equity interest of the target company Hangzhou Huazhan Real Estate Development Co., Ltd. (which owns 100% of the target project). After the completion of the equity transfer, the target company will no longer be a subsidiary of the company. The target project is a commercial complex developed by the group and 100% owned by the target company. It is located at 3867 Binsheng Road, Pu Yan Street, Hangzhou, Zhejiang Province, China. It includes a shopping mall complex called Hangzhou Binjiang Baolong City and a hotel called Hangzhou Binjiang Baolong Ying Jin Hotel. By transferring the ownership interests of the target company and target project to Lian Shang Yi Hao, the group will be able to receive cash proceeds in a relatively short period of time. The proceeds will improve the group's liquidity position and support its daily operations and property development projects. The group also has the right to repurchase the target company and target project from Lian Shang Yi Hao at a predetermined price benchmark in the future, allowing the group to regain ownership and control of the target company and target project based on future strategic layouts, liquidity, and business needs. The estimated net proceeds from the equity transfer are approximately RMB 997 million. Of the net proceeds from the equity transfer, the company plans to use 45% for its property development to ensure timely delivery, 20% for general operating expenses, 15% for tax expenses, 10% for expenses related to overseas reorganization of the group, and 10% for expenses related to domestic reorganization of the group.