Black Peony: Plans to reduce capital by 882 million yuan in its associate company Danhong Real Estate.

Black Peony announced that its wholly-owned subsidiary, Black Peony Real Estate, plans to reduce capital in its associate company, Danhong Real Estate, together with Yaokun Real Estate in proportion to their respective shareholdings, with a total capital reduction of RMB 1.80 billion; of this, Black Peony Real Estate will reduce capital by RMB 882 million, with its capital contribution decreasing from RMB 911 million to RMB 29.40 million. After completion of this capital reduction, Danhong Real Estate's registered capital will decrease from RMB 1.86 billion to RMB 60.00 million, Black Peony Real Estate will still hold a 49% equity interest in it, and Danhong Real Estate will remain an associate company of the Company. Because the Company's director and chief financial officer, Yun Lingli, concurrently serves as a director of Danhong Real Estate, this capital reduction constitutes a related-party transaction and does not constitute a major asset restructuring. This matter has been deliberated and approved by the Company's board of directors and still needs to be submitted to the shareholders' meeting for deliberation.