CTF SERVICES (00659) intends to sell 100% equity interest in Man Cheuk, 25% equity interest in Jingzhu, and 25% equity interest in Yuezhao.

CTF SERVICES (00659) announces that on November 10, 2026, Seller A (an indirectly wholly-owned subsidiary of the Company, as seller) and Buyer A (as buyer) entered into the Man Cheuk Share Transfer Agreement, pursuant to which Seller A has conditionally agreed to sell, and Buyer A has conditionally agreed to purchase, 100% equity interest in Man Cheuk, for a cash consideration of RMB542 million. Man Cheuk is principally engaged in investment holding and indirectly holds approximately 38.5% effective equity interest in Huishen (Yantian) Expressway Huizhou Co., Ltd., which is principally engaged in the operation of the Shenzhen-Huizhou Expressway (Huizhou Section) in China. On November 10, 2026, Seller B (an indirectly wholly-owned subsidiary of the Company, as seller) and Buyer B (as buyer) entered into the Jingzhu Share Transfer Agreement, pursuant to which Seller B has conditionally agreed to sell, and Buyer B has conditionally agreed to purchase, 25% equity interest in Jingzhu, for a cash consideration of approximately RMB747.4 million. Jingzhu is principally engaged in the operation of the Jingzhu Expressway (Guangzhou-Zhuhai Section) in China. On November 10, 2026, Seller C (an indirectly wholly-owned subsidiary of the Company, as seller) and Buyer B (as buyer) entered into the Yuezhao Share Transfer Agreement, pursuant to which Seller C has conditionally agreed to sell, and Buyer B has conditionally agreed to purchase, 25% equity interest in Yuezhao, for a cash consideration of RMB690 million. Yuezhao is principally engaged in the operation of the Guangzhou-Zhaoqing Expressway in China. The aggregate consideration for the disposals contemplated under the Disposal Agreements is approximately RMB1.9794 billion. Upon completion of the Disposals, the Group will no longer hold any equity interest in the target companies. The relevant toll road projects have, through past dividend distributions and the proceeds from the Disposals, generated an overall positive investment return for the Group, with an annualized investment return of approximately 15%, and the aggregate of dividend distributions and proceeds from the Disposals is approximately 3 times the Group's investment capital. Despite the positive investment return, the Group expects to record an estimated aggregate net loss (after tax) of approximately RMB170 million for the financial year ending June 30, 2027 in respect of the Disposals, subject to a number of factors, including but not limited to the completion of the Disposals and the final review results of the Company's auditors. The Group has been closely monitoring the operating environment of the toll road industry, which continues to face both structural and cyclical challenges. Although the macroeconomic outlook for mainland China is expected to gradually improve, toll road assets remain exposed to risks such as uneven recovery paces across regions, changes in traffic patterns caused by fluctuations in economic and import/export activities, the continued expansion and optimization of competitive road networks, and increasing operational and regulatory complexity. Taken together, these factors have led to increased volatility in overall industry profitability and a more uncertain growth outlook. The relevant toll road projects are stable infrastructure assets within the Greater Bay Area, in which the Group holds minority equity interests through the target companies. The Disposals present an opportunity for the Group to realize the value of its mature minority equity investments at a fair and reasonable valuation and with relatively high transaction certainty, taking into account the identity of the buyers and the agreed transaction terms. The Group believes that the existing shareholders of the project companies have established interests in and in-depth understanding of the relevant projects, and are therefore well positioned to acquire the Group's interests, thereby ensuring an orderly transition of ownership and maintaining continuity in project development and operation. The Disposals are in line with the Group's ongoing portfolio optimization and capital allocation strategy and are expected to enhance the Group's financial flexibility and provide additional resources to facilitate its future growth plans. The proceeds from the Disposals are intended to be reinvested in investment projects that align with the Group's strategic priorities and offer long-term growth potential and better return prospects, and to be used for other general corporate purposes of the Group. This will enable the Group to strengthen its focus on creating sustainable value for its shareholders.