Nanhua Group Holdings (00413) subsidiary plans to sell all shares of Sparkling Honor Holdings Limited and Huasheng Electronics Co., Ltd. for HK$16 million

Zhitong Financial App News, Nanhua Group Holdings (00413) issued an announcement. On August 27, 2026, the seller WTS International (BVI) Limited (an indirect wholly-owned subsidiary of the Company) (as the seller) entered into a sales agreement with the buyer Best Galaxy Holdings Limited (the contact person of Mr. Wu, a related person of the Company) (as the buyer). According to this, according to the terms of the sales agreement and subject to its conditions, the seller has conditionally agreed to sell at the price, and the buyer has The conditions agree to purchase the entire issued share capital (i.e. sale of shares) of the target companies (Sparkling Honor Holdings Limited and Huasheng Electronics Co., Ltd.) at a cost. The cost of selling the shares was HK$16 million.

The appreciation of the RMB, weak consumer confidence, sluggish global economic conditions, heightened geopolitical tension, and ongoing policy uncertainty (including the continued imposition of tariffs by the US) are curbing global demand for non-essential consumer goods such as toys. As a result, the Group's major US customers have adopted a more conservative and risk-free ordering strategy.

In addition, the Group was also adversely affected by a major customer's sharp decline in demand for specific toy products during the 2025 sales season, which led to a sharp decrease of approximately 41% in revenue for the year ended 31 December 2025. Since there are fixed costs involved in maintaining the operation of manufacturing plants, the continuation of related losses will cause significant damage to the Group's interests if operations are not suspended or closed.

As a result, the Group is strategically restructuring its toy business to shift from OEM production and operation to a trade-based model. This is expected to optimize resource allocation, reduce operating costs and improve the Group's overall operating efficiency.

Furthermore, due to historical reasons, Target Company 2 (Huasheng Electronics Co., Ltd.) has not been able to obtain ownership certificates for any buildings. In view of the Group's strategic restructuring of its toy business, we believe that using resources to take defensive measures to preserve the right to use the property is not in the Group's best interest.