According to Zhitong Finance App News, Lehua Entertainment (02306) announced that on September 24, 2026, Tianjin Yihua (a wholly-owned subsidiary of the Company) and Shenzhen Yiqi signed a share transfer agreement. According to this, Shenzhen Yiqi agreed to transfer to Tianjin Yihua a total of about 46.55% of the shares held by Shenzhen Yihua and its peers at a cost of RMB 4 million. This will be paid in cash by Tianjin Yihua to Shenzhen Yiqi upon or before completion.
As of the date of this announcement, our counterpart with China has 53.45% of the shares in Tianjin Yihua, so it is a subsidiary of the Company that holds the majority of shares indirectly. After completion, Tianjin Yihua will hold all of the shares of Huaping and Huanxing will become an indirect wholly-owned subsidiary of the Company.
Huadong is currently an indirect non-wholly-owned subsidiary of the Company. Since forming a business cooperation with Shenzhen Yiqi, it has a complete business in the design, manufacture and marketing of Chaowan and related products. Since 2025, the launch of the trendy game business has received satisfactory market popularity and feedback, enabling the company to make better use of its existing internal resources and market response to further develop its trendy game business.
The board of directors believes that through the acquisition, the company will be able to hold its Chinese counterpart as an indirect wholly-owned subsidiary, thereby making the internal decision-making process smoother, integrating resources, and enabling the company to continue to develop trendy business with full operational control and higher efficiency. At the same time, the acquisition will enable the company to more effectively integrate and optimize intercompany resources within the group and enhance synergy with its Chinese counterpart and other business divisions of the company (such as its artist management and IP operation business). Furthermore, after completion, Shenzhen Yiqi will no longer be the company's affiliate at the subsidiary level. It is expected that this will reduce the scope and administrative costs of future connected transactions between the two parties.
Furthermore, it concerns (including) the strategic cooperation framework agreement with Shenzhen and proposed transactions under it. On September 24, 2026, Tianjin Yihua, Shenzhen Yiqi, and their Chinese counterpart signed a termination agreement. Based on this, the strategic cooperation with Shenzhen Yiqi was terminated.