BONNY HLDG (01906) has announced a proposed sale of the entire issued share capital of its Hong Kong subsidiary, which holds the brand product business and related properties. The move is intended to mitigate the ongoing negative impact of declining revenue from the brand product segment on the Group's profitability. The buyer is Hong Kong Baide Trading, with Mr. Jin Bo, son of the Company's controlling shareholder Mr. Jin, serving as the acquirer. The transaction, valued at RMB 241.7 million in cash, will result in the Hong Kong subsidiary ceasing to be a subsidiary of the Company.

Following the completion of the sale, the Group will focus on its ODM business. All bank and other borrowings secured by the properties, amounting to approximately RMB 223 million as of December 31, 2025, will be transferred out of the Group, significantly reducing its overall financial burden.

As the factories used for the Group's ODM operations are located within properties owned by Zhejiang BONNY, the Company's subsidiary Yiwu BONNY will enter into a three-year lease agreement with Zhejiang BONNY for the use of these premises, effective from the completion date. Under Hong Kong Financial Reporting Standard 16, the leased areas will be recognized as right-of-use assets by the Company.

Additionally, since the Group possesses the necessary machinery, equipment, and technology for the brand product business, a framework agreement will be established with the Hong Kong subsidiary. Under this agreement, the Group will provide manufacturing services to the Hong Kong subsidiary’s group for the brand product operations for a period of three years from the completion date.