Chow Tai Fook Foundations (00659) plans to sell 100% of Wanjue's shares, 25% of Jingzhu's shares, and 25% of Guangdong's shares

According to Zhitong Finance App, Chow Tai Fook (00659) announced that on November 10, 2026, Seller A (an indirect wholly-owned subsidiary of the Company, as the seller) entered into a Wanjue share transfer agreement with Buyer A (as the buyer). Seller A conditionally agreed to sell, while Buyer A conditionally agreed to buy 100% of Manjue's shares at a cash cost of RMB 542 million.

Wanjue is mainly engaged in investment holding and indirectly holds about 38.5% of the actual shares of Huishen (Yantian) Expressway Huizhou Co., Ltd., while Huishen (Yantian) Expressway Huizhou Co., Ltd. is mainly engaged in the operation of the Shenzhen-Huizhou Expressway (Huizhou section) in China.

On November 10, 2026, Seller B (an indirect wholly-owned subsidiary of the Company, as the seller) entered into a Beijing-Zhu equity transfer agreement with Buyer B (as the buyer). Seller B conditionally agreed to sell, while Buyer B conditionally agreed to buy 25% of Jingzhu's shares. The cash cost was approximately RMB 747.4 million.

Beijing-Zhuhai mainly operates the Beijing-Zhuhai Expressway (Guangzhou-Pearl section) in China.

On November 10, 2026, Seller C (an indirect wholly-owned subsidiary of the Company, as the seller) entered into a Yuezhao share transfer agreement with Buyer B (as the buyer). Seller C conditionally agreed to sell, while Buyer B conditionally agreed to buy 25% of Yuezhao's shares at a cash cost of RMB 690 million.

Yuezhao mainly operates the Guangzhou-Zhaoqing Expressway in China.

The total cost of the proposed sale under the sale agreement is approximately RMB 1,9794 million.

Once the sale is completed, the Group will no longer hold any shares in the target company. The relevant toll road project has brought the Group an overall positive return on investment through past dividend distributions and sales. The annualized return on investment is about 15%, and the total proceeds from dividend distribution and sales are about 3 times the Group's invested capital. Despite having achieved a positive return on investment, the Group expects to obtain an estimated net loss (after tax) of approximately RMB 170 million on sales for the financial year ending June 30, 2027, which is subject to a number of factors, including but not limited to the completion of the sale 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 still face risks such as uneven pace of recovery in various regions, changes in traffic patterns due to fluctuations in the economy and import and export activities, continued expansion and optimization of competitive road networks, and increasing operational and regulatory complexity. Based on the above, these factors have led to increased profit fluctuations in the overall industry, and the growth prospects are even more uncertain.

The relevant toll road projects are sound infrastructure assets in the Greater Bay Area, and the Group holds a minority interest in them through target companies. The sale provides the Group with an opportunity to realise the value of its mature minority equity investment based on fair and reasonable valuation and with a relatively high degree of transaction certainty taking into account the buyer's identity and agreed terms of the transaction. The Group believes that the current shareholders of the project company have existing interests and in-depth understanding of the relevant projects, and are therefore preparing to acquire the Group's interests to ensure an orderly transition of ownership and maintain the continuity of project development and operation. The sale is in line with the Group's ongoing portfolio optimization and capital allocation strategy, and is expected to enhance the Group's financial flexibility and provide additional resources to support its future growth plans.

Proceeds from the sale are intended to be reinvested in investment projects that meet the Group's strategic priorities, have long-term growth potential and better return prospects, and be used for other general corporate purposes of the Group. This move will strengthen the Group's focus on creating sustainable value for its shareholders.