JY GRANDMARK (02231) plans to sell 100% equity of Guangzhou Zhuodu Property Management.

JY GRANDMARK (02231) announced on April 4, 2026 that the seller (Guangzhou Enno Industrial Co., Ltd., an indirect wholly-owned subsidiary of the company) intends to sell 100% equity of the target company (Guangzhou Zuodu Property Management Co., Ltd.) to the buyer (Guangzhou Yimei Property Management Co., Ltd.). After the transaction, the target company will no longer be a subsidiary of the company. Therefore, the financial performance, assets, and liabilities of the target group will no longer be consolidated into the group's financial statements. The target company and its subsidiaries (the target group) are mainly engaged in property management business. The sale is primarily based on four key considerations, namely cash preservation and realization, strategic focus, compliance and risk mitigation, and capital optimization, which are particularly relevant during a deep industry adjustment period. The group expects to achieve the following goals through the sale: (i) divesting inefficient assets: despite continuous efforts to improve operations, the financial performance of the target group's property management business has been unsatisfactory due to rising labor costs, government-regulated levels of property management fees, and declining collection rates. Several projects of the target group continue to generate losses. As of December 31, 2025, the target group had a net liability value of approximately RMB 6.56 million, which posed a financial burden on the group. The current market conditions provide an opportunity for the group to prioritize liquidating the target group to improve liquidity and ease short-term financial pressures. (ii) clearing accounts receivable and bad debt risks: financial difficulties of some real estate developers have led to impairment risks in property management accounts receivable. The sale allows the group to eliminate credit risks in one go, avoiding continued adverse effects on its financial performance. (iii) focusing on core business and adapting to industry transformation: by optimizing its business portfolio through the sale, the group can strengthen its strategic focus on its core property development business, while reducing the integration complexity and ongoing operating and management costs associated with the property management division.