OCT (ASIA) plans to sell the Chaohu and Hefei plots through land acquisition and storage methods.

OCT (ASIA)(03366) announced that Hefei Huanchao (an indirectly owned non-wholly owned subsidiary) plans to return the Chaohu land parcel to the Chaohu Land Reserve Center through land acquisition and storage method. The compensation fee for the Chaohu land parcel will be RMB 596 million. Hefei Overseas Chinese City Industry (an indirectly owned non-wholly owned subsidiary) plans to return the Hefei land parcel to the Hefei Land Reserve Center through land acquisition and storage method. The compensation fee for the Hefei land parcel will be RMB 1.725 billion. As one of the group's strategic priorities and to further consolidate the foundation for the group's long-term development, the group has been closely monitoring the market, adjusting its strategic layout and construction planning flexibly, and making investment and expenditure decisions prudently. In this context, the Chaohu and Hefei land parcels are undeveloped land. The group has carefully evaluated the costs required to develop these parcels, the expected returns, as well as the related risks and uncertainties. Considering the current market conditions, the company believes that investing a large amount of capital in promoting construction at this stage may not be prudent or effective use of resources, and could potentially bring additional debt risks, financial pressure, and loss risks to the group. On the other hand, the group has attempted to sell these land parcels, but has not been successful due to factors such as lack of willing and capable buyers and significant differences in price expectations. The company believes that the Chaohu land acquisition and Hefei land acquisition could provide opportunities to unlock assets, reduce operational risks associated with these assets, and enhance the group's flexibility and development potential. The cash compensation fees for the land parcels will bring additional cash flow to the group, improve its working capital situation, liquidity, and risk resistance capabilities.