XUNZHONG (02597) intends to transfer 49% equity of its subsidiary Jiangsu Hongluo.

XUNZHONG (02597) announces that, according to the company's business development plan, Beijing XUNZHONG Technology Co., Ltd. (hereinafter referred to as the "Company") intends to transfer 49% of the equity of its wholly-owned subsidiary Jiangsu Hongluo Network Technology Co., Ltd. (hereinafter referred to as "Jiangsu Hongluo") (with a subscribed registered capital of 10 million yuan and a paid-up capital of 2.503 million yuan) to Shanghai Hongshunshu Technology Co., Ltd. (hereinafter referred to as "Shanghai Hongshun"). The pricing of this equity transfer is based on the registered capital of Jiangsu Hongluo. The transferred equity does not correspond to the paid-up capital. The transfer price is zero yuan because Shanghai Hongshun has not completed the payment of the 49% equity acquired. After the completion of the equity transfer, Shanghai Hongshun will fulfill the corresponding obligation to pay up the capital according to the proportion of the equity acquired. The specific terms will be subject to the formal agreement signed by both parties. Shanghai Hongshun has no relationship with the Company and there is no related-party transaction involved. Once approved by the board of directors, the Company will begin processing the relevant equity transfer procedures. After the completion of this equity transfer, the Company will hold 51% of the equity of Jiangsu Hongluo, while Shanghai Hongshun will hold 49%. This transfer of equity in the wholly-owned subsidiary is based on the company's overall strategic development plan, aiming to optimize the business layout and investment structure. It is beneficial for the company to leverage the resources of its partners to develop advantageous business, enhance the overall profit capabilities and core competitiveness of the company.