Baofang Holdings: Wholly-owned subsidiary plans to set up a holding company with a registered capital of 20 million yuan to conduct related party transactions.

Baofang Group announced that its wholly-owned subsidiary Baofang Tianjin plans to jointly invest 20 million yuan with Gao Zhiming and Wang Zhimin to establish Tianjin Trade Company, with shareholdings of 60%, 30%, and 10% respectively. As the chairman of the company, Wang Qinghua, has a relationship as uncle and nephew with Wang Zhimin, this transaction constitutes a related party transaction, but not a major asset restructuring. It has been reviewed and does not require approval at the shareholders' meeting. There have been no related party transactions in the past 12 months. The business of the newly established company has not started, so it will not have a significant impact on performance in the short term. There is uncertainty in the future due to market conditions.