Yingyuzhou (03700) subsidiary plans to sell 40% of Guangzhou Kuaichuang Network Technology Co., Ltd.'s shares for 80 million yuan

According to Zhitong Finance App News, Yingyuzhou (03700) issued an announcement. On October 9, 2026 (after the transaction period), the contracting party concluded an equity transfer agreement. According to this, the seller Yingyu (Hainan) Technology Co., Ltd. (the company's indirect wholly-owned subsidiary) has agreed to sell shares, and the buyer Guangzhou 1846 Technology Co., Ltd. (the company's related party at the subsidiary level) has agreed to buy and sell shares at a cost of RMB 80 million.

On the date of this announcement, the Group indirectly held 40% of the shares of the target company Guangzhou Kuaichuang Network Technology Co., Ltd. Once the sale is completed, the Group will no longer hold any shares in the target company. As a result, the target company will no longer be a subsidiary of the company, and its financial results will no longer be incorporated into the Group's consolidated financial statements.

The directors believe that in an increasingly competitive and rapidly changing market, combined with fluctuations in the target group's profitability and uncertain prospects for recovery, continuing to invest in the target group's traditional short drama production business will expose the group to the risk of rising costs and uncertain returns. Through the sale, the Group can reduce the uncertainty of its return on investment from the target group. At the same time, the sale will enable the Group to reallocate its financial and management resources to its core business and other strategic opportunities to provide more sustainable returns.

The board of directors plans to use the net proceeds from the sale of approximately RMB 72.8 million (after deducting estimated tax expenses and transaction costs of approximately RMB 7.2 million) to strengthen the Group's core business and support strategic AI transformation. The move includes allocating approximately RMB 54.6 million to continuously optimize the Group's underlying AI computing infrastructure and R&D of multi-modal AI applications to enable the Group's overseas innovation business expansion; and disbursing approximately RMB 18.2 million for the Group's general working capital and the daily administrative expenses of overseas teams.