TIANYUAN HEALTH: Hengqin Hanyue Mei and Shanghai Rifu plan to increase capital in Shanghai Rifu

According to the announcement from Tianyuan Health (00557), on July 21, 2025, Hengqin Hanyuemei (the Company's indirect wholly-owned subsidiary) and Shanghai Rifu (the Company's indirect non-wholly-owned subsidiary) entered into a capital increase agreement with Shanghai Huaman. Hengqin Hanyuemei will increase its investment in Shanghai Rifu by RMB 15.5152 million (approximately HKD 16.9116 million) by converting the RMB 15.5152 million (approximately HKD 16.9116 million) convertible debt owed by Shanghai Rifu into convertible capital of RMB 15.5152 million (approximately HKD 16.9116 million); and Shanghai Huaman will contribute cash to increase its investment in Shanghai Rifu by RMB 10 million (approximately HKD 10.9 million). The two capital increases will be conducted according to the respective shareholding ratios of Hengqin Hanyuemei and Shanghai Huaman in Shanghai Rifu.

Upon completion of the capital increase, the registered capital of Shanghai Rifu will increase from RMB 2.3846 million to RMB 27.8998 million, while the shareholding ratios of Hengqin Hanyuemei and Shanghai Huaman in Shanghai Rifu will remain unchanged at 60.8077% and 39.1923%, respectively.

On July 21, 2025 (after trading hours), Shanghai Rifu (the Company's indirect non-wholly-owned subsidiary) and Shanghai Huaman entered into a shareholder loan agreement, whereby Shanghai Huaman agreed to provide a principal amount of RMB 3 million (approximately HKD 3.27 million) as a shareholder loan to Shanghai Rifu, with a loan term of 36 months.

On May 22, 2025, Shanghai Huaman paid a total of RMB 13 million (approximately HKD 14.17 million) as a prepayment to Shanghai Rifu.

At the time of the prepayment, Shanghai Huaman and Shanghai Rifu were negotiating the main terms of the capital increase agreement and the shareholder loan agreement.

In light of Shanghai Rifu's working capital needs, the capital increase and shareholder loan will provide additional working capital for Shanghai Rifu's daily business operations through a combination of equity financing and interest-free debt financing, thereby further enhancing its development capabilities and improving the competitiveness of the Group's core business of providing medical-related services in China.

In addition, Shanghai Huaman's capital contribution and provision of shareholder loans have strengthened the long-term strategic cooperation between the Group and Shanghai Huaman. Shanghai Huaman is a medical beauty market promotion company based in Shanghai, covering the East China region and possessing a wide network of beauty industry partners. Therefore, the Board believes that Shanghai Huaman has strategic value for the Group, as it can introduce potential cooperation opportunities with other medical beauty centers in China, thereby acquiring customers. The capital increase and shareholder loan reflect the further shareholder commitment of strategic partner Shanghai Huaman to the Group, which will help facilitate further operational and overall support and resources for Shanghai Rifu and the Group, bringing development momentum to both Shanghai Rifu and the Group