RUIHE DATA plans to expand its revenue sources by engaging in cryptocurrency business

According to the announcement from RUIHE DATA (03680), in order to diversify the group's revenue sources, the group plans to engage in cryptocurrency business through services provided by Bitmain (www.bitmain.com) in the form of cloud mining services. As far as the directors are aware, the service provider and its ultimate beneficial owners are independent third parties of the company.

By paying service fees to the service provider, the group will receive mining rewards distributed by the service provider at agreed intervals. According to the group's accounting policies, revenue from cryptocurrency business will be recognized when the group has established the right to receive cryptocurrency, it is probable that economic benefits associated with the cryptocurrency will flow into the group, and the amount of cryptocurrency can be measured reliably. Therefore, the group's management believes that this diversification measure will provide additional sources of income in the future.

The board believes that Bitcoin mining, as an independent business segment, can provide the group with opportunities in the digital asset and emerging technology fields that differ from traditional operating and investment models. In the context of increasing macroeconomic uncertainty, such business has greater strategic value. Furthermore, this business not only has high return potential but also promotes the group's layout in the blockchain and digital asset innovation fields, establishing the company's forward-looking position, which aligns with the relevant policy directions of the Hong Kong Special Administrative Region government.

The service provider is a global leader in digital currency mining machine manufacturing, maintaining a long-term leading position in global market share and technology, with operations in over 100 countries and regions, and branches in places such as Hong Kong, the United States, Malaysia, the United Arab Emirates, Lithuania, and Paraguay.

By outsourcing the Bitcoin mining business to the service provider, the group can transfer part of the risks and responsibilities, avoiding large upfront capital investments in mining hardware, infrastructure, and maintenance costs, thus converting capital expenditures into more manageable operating expenses. This arrangement reduces operational complexities and risk exposures related to hardware failures, energy management, and technical challenges. More importantly, the group can flexibly adjust the scale of mining according to demand without being constrained by fixed assets. According to the terms of the service agreement, the group also has the right to purchase mining machines to directly control mining operations and hardware when necessary.

With the rapid development of Hong Kong's digital economy and virtual asset industry, the group's initiative to expand into cryptocurrency business is highly aligned with this trend and the future direction of financial technology development