GUAN CHAO HLDGS (01872) intends to sell 50% equity interest in a Singapore joint venture company for S$1.37 million.

GUAN CHAO HLDGS (01872) announced that on May 22, 2026, its indirect wholly-owned subsidiary, Vincar Pte. Ltd., intends to sell 50% of the shares of Komoco Pre-owned Pte. Ltd. (a joint venture), to Komoco Trading Pte. Ltd. for a consideration of SGD 1.37 million. The joint venture is a limited liability company registered in Singapore, primarily engaged in buying and selling used gasoline cars. In 2025, the joint venture's profits significantly decreased from around SGD 20 million in 2024 to approximately SGD 4.5 million. The significant decline in profits was mainly attributed to (i) government policies promoting electrification of transportation; and (ii) the increasing popularity of affordable new electric vehicles, along with incentives such as tax rebates, parking, and charging discounts, shifting demand away from used gasoline cars. These factors led to a decrease in both supply and demand for used gasoline cars in Singapore, resulting in lower trading volumes and prices, and consequently reducing profits. Following an internal review and discussion, and considering the company's strategic direction, the directors have decided to divest the company's investment in the joint venture. While the company remains committed to developing its automotive trading business, it has been decided to consolidate the related operations and resources into its subsidiary. This strategy aims to strengthen operational focus and improve financial performance by no longer injecting more capital into the joint venture and distributing profits.