DA SEN HLDGS (01580) subsidiary intends to acquire all of the issued share capital of Chance Rich International Trading for approximately 9.5 million Hong Kong dollars.

DA SEN HLDGS (01580) announced that on January 18, 2026, the company, the buyer, the Xiong Ying Group Limited (a wholly-owned subsidiary of the company), and the sellers (Mr. Huang Jianting and Ms. Li Ziyun) entered into an agreement. Under this agreement, the buyer conditionally agrees to purchase all issued shares of the target company for a consideration of approximately HK$9.5 million, to be paid in the form of issued price shares pursuant to a special authorization. The target company, Chance Rich International Trading Limited, is a limited company registered in Hong Kong on August 6, 2019, mainly engaged in the procurement and sales of plywood products and other building materials. The products of the target company mainly include: (i) ordinary panels used for interior decoration of buildings and production of wooden furniture for homes and offices; (ii) packaging panels used as packaging materials; (iii) structural panels used for construction; (iv) floor base materials used for flooring; and (v) other building materials products, such as concrete panels used for external construction. As of the financial year ended March 31, 2025, due to fierce competition in the plywood industry leading to a low gross profit margin, the group has maintained the minimum scale operation of plywood sales business. However, the group has no intention to terminate the operation of plywood sales business, and is actively developing new wooden products with higher profit margins than traditional plywood products. Nevertheless, the group's existing customers are mainly mid-range furniture or building material manufacturers in China. Due to the fierce competition in the plywood industry and the shrinking demand in the mid-range furniture and building material market in China, the group is unable to sell products to existing customers at a higher profit margin. In this regard, the target company has established a stable customer base for its wooden products, which not only covers multiple countries geographically but also includes diverse industries. In addition, the management of the target company has rich experience in overseas market operations, and has established a network and reputation among customers who frequently visit overseas markets. Therefore, the acquisition will effectively enable the group to enter overseas markets and develop the plywood business. After the completion of the acquisition, the group will modernize and upgrade its existing production base in Heze City, Shandong Province, to become a production center for new plywood products, covering most of the plywood products currently purchased and sold by the target company. It is expected that the production facility will complete modernization and commence production of new products by the mid-2026. With the senior management of the target company staying on and joining the group, it is expected that the group can save preparation time and costs for upgrading the production facility, thereby enhancing the operational efficiency of the plywood business.