Henghe Group (00513) plans to sell all of Zhicai Group's shares for HK$85 million and resume trading on August 20

Zhitong Finance App News, Henghe Group (00513) issued an announcement. On August 18, 2026 (after the transaction period), the seller Henghe Real Estate Development Co., Ltd. (that is, a direct wholly-owned subsidiary of the company), the buyer CheerStay (BVI) Limited and the company (as the seller's guarantor) entered into a sales agreement. According to this, the seller conditionally agreed to sell the shares for sale to the buyer (accounting for the entire issued share capital of the target company Zhicai Group Co., Ltd.) and procured the transfer of the debt to be sold to the buyer; and the buyer also agreed on the terms of the place to be purchased Selling shares and waiting The total cost of the sale debt was HK$85 million (subject to adjustments based on the sale agreement).

After completion, the target company will no longer be an indirect wholly-owned subsidiary of the Company, and its financial results will no longer be incorporated into the Group's financial statements.

The target company is mainly engaged in property holding and property development business. Its main asset is a property (the property) located at 164 and 164A Boundary Street, Kowloon, Hong Kong. It is a vacant redevelopment site with a site area of about 5,054 square feet.

The Board believes that in the current uncertain macroeconomic environment and challenging property market conditions, the sale provides the Group with a good opportunity to realise its investment in the target company and the property, and can avoid further capital commitments on the property. In particular, the Board believes that it is commercially prudent to carry out the sale at this stage; any delay may subject the Group to ongoing market risk, and there is no guarantee that the Group will be able to realise the property on the same or better terms in the future.

The Board also notes that if the Group does not carry out the current sale, continuing to hold the property and any proposed redevelopment will require more time, capital and financing, including additional capital expenses relating to land compensation and other redevelopment costs, which may result in additional cash outflows and place an additional burden on the Group's financial resources. Any redevelopment project for this property will take a long time to develop, and the cash flow is expected to be realized after about three years. During this period, the Group will continue to face market uncertainty and execution risks.

The Board has also taken into account that the proposed redevelopment of the property faces a number of uncertainties and challenges, including (among others) contract amendment procedures, land compensation assessments, additional capital and financing requirements, construction and execution risks, and market risks associated with the property market and overall economic conditions. The sale enabled the Group to monetize the investment, reduce the uncertain risks associated with the redevelopment of the property, release the capital tied to the project, and reallocate financial and management resources to other business operations and capital requirements at this stage.

Therefore, although the sale may cause the Group to lose money, the Board of Directors believes that the current sale will allow the Group to ensure that losses are stopped in a timely manner, avoid further capital and capital requirements for the property, and reduce the risk that future monetization conditions will become more unfavorable.

At the request of the Company, trading of shares was temporarily suspended on the Stock Exchange starting at 9:00 a.m. on August 19, 2026, pending publication of this announcement. The Company has applied to the Stock Exchange to resume trading of shares on the Stock Exchange from 9:00 a.m. on August 20, 2026.