YUFENGCHANG HLD received a discount of approximately 54.02% from director Luo Mingyi for the full acquisition offer

According to the Zhitong Finance APP, YUFENGCHANG HLD (08631) announced that due to Mr. Wang Xinlong's personal financial pressure, coupled with the company's deteriorating financial condition and urgent working capital needs, Mr. Luo Mingyi granted a loan of HKD 5.5 million to Mr. Wang Xinlong on May 22, 2025, which was withdrawn on the same day. The loan bears interest at an annual rate of 15% and is to be repaid five calendar months from the date of withdrawal (i.e., by October 21, 2025). The loan is provided to Mr. Wang Xinlong to settle his personal debts to relieve the existing property burdens from his beneficially owned shares and to provide funding for the company's working capital needs. In particular, according to the loan agreement, the loan must be utilized as follows: (i) HKD 1.7 million to release the existing share pledge granted to Jiehao Securities Co., Ltd. under the financing arrangement to support the 2024 general offer; and (ii) HKD 3.8 million to provide general working capital for the company. Regarding the loan, Hong Kong YUFENGCHANG, the controlling shareholder wholly owned by Mr. Wang Xinlong, agreed to provide a guarantee, pledging all 25.563 million ordinary shares of the company (approximately 63.91% of the issued share capital) in favor of Mr. Luo Mingyi as the beneficiary under the share pledge agreement signed on the same day. Aside from the share pledge in favor of Mr. Luo Mingyi, the loan is unsecured and is not supported by any guarantees, collateral rights, or other forms of security. According to Mr. Luo Mingyi's knowledge, understanding, and belief, after the loan was granted, Mr. Wang Xinlong's financial condition and the company's liquidity further deteriorated. These circumstances constitute a material adverse change under the loan agreement and trigger an event of default. In particular, under the loan agreement, an event of default includes situations where the lender, Mr. Luo Mingyi, has reasonable grounds to believe that any of the following circumstances have occurred: a material adverse change in the company's business, financial condition, or prospects, or that Mr. Wang Xinlong or any other obligor's ability to perform their obligations has been or will be materially adversely affected. According to Mr. Luo Mingyi's knowledge and belief, on the date of enforcing the share pledge, Mr. Wang Xinlong failed to fulfill significant personal obligations arising from the 2024 general offer, including unpaid professional fees owed to Shenwan Hongyuan Financing (Hong Kong) Limited (the financial advisor for Hong Kong YUFENGCHANG's 2024 general offer). Furthermore, the company failed to settle amounts owed to its professional service providers, with debts exceeding HKD 900,000. Several of these professional service providers have issued demand letters or legal notices regarding unpaid fees since early August 2025. These circumstances demonstrate a continued inability to fulfill financial obligations and trigger an event of default under the loan agreement. Therefore, on August 6, 2025, following the default, Mr. Luo Mingyi enforced his rights under the share pledge agreement, resulting in the transfer of all pledged shares to him on the same day. Following the enforcement, the offeror, Quanbao Group Limited, Mr. Luo Mingyi, and any parties acting in concert with them hold interests in 27.559 million shares (equivalent to approximately 68.90% of the company's total issued share capital as of the date of this announcement). Therefore, the offeror must make a mandatory unconditional cash offer for all issued shares (excluding those already owned or agreed to be acquired by the offeror, Mr. Luo Mingyi, and any parties acting in concert with them) in accordance with Rule 26.1 of the Takeovers Code The cash offer for each share is HKD 0.223, representing a discount of approximately 54.02% compared to the closing price of HKD 0.485 per share reported on the last trading day on the Stock Exchange. The offer is unconditional in all respects and is not subject to the acceptance of a minimum number of shares or any other conditions. It is reported that the offeror is wholly and ultimately owned by Mr. Luo Mingyi