Ruicheng China Media (01640) announced that on June 28, 2024, the seller, Beijing Ruicheng Advertising Co., Ltd., an indirect wholly-owned subsidiary of the company, entered into an equity transfer agreement with the buyer, Beijing Youlan Culture Media Co., Ltd., to sell and buy all the equity of Shanghai Karen Advertising Co., Ltd., the target company, for RMB 200,000, subject to the terms of the equity transfer agreement.

The announcement stated that as of the date of this announcement, the target company has no active or ongoing projects, and the group does not foresee it engaging in any other advertising projects in the near future. The execution and planning of its previously completed projects are mainly carried out by personnel of the subsidiary company of the company located in Beijing. After considering the above, as well as the unaudited net loss of the target company for the year ended December 31, 2023, and the unaudited net amount of liabilities as of May 31, 2024, the directors believe that the sale will bring opportunities to the group and refocus its manpower and resources on its main subsidiary located in Beijing (i.e. the seller). In addition, the expected sale can save the group relevant operating costs and improve its operating capital position. After the completion of the sale, the seller (i.e. the company's subsidiary in China) will take over the remaining business relationships of the target company (if any), so it is expected that the sale will not have any significant adverse impact on the group's business operations.