Zhongtong Finance and Economics APP News, GF Healthcare (08143) announced that on October 25, 2024, its indirect wholly-owned subsidiary GF Chuangzhan Co., Ltd. (GF Chuangzhan) entered into a cooperation and management agreement with Xiamen Yueerwan Medical Management Co., Ltd. (Xiamen Yueerwan) and Yueerwan (Qingdao) Internet Hospital Co., Ltd. (Yueerwan Qingdao, a direct wholly-owned subsidiary of Xiamen Yueerwan). Under the agreement, GF Chuangzhan agreed to provide hospital management services to Yueerwan Qingdao and Qingdao Yueerwan Internet Hospital (Internet Hospital)(operated by Yueerwan Qingdao), while Yueerwan Qingdao agreed to pay GF Chuangzhan (i) a fixed monthly management fee of 1.75 million Hong Kong dollars; or (ii) an amount equivalent to (a) 1% of the operating income of the Internet Hospital as shown in the audited financial reports for the relevant fiscal year; and (b) the total management fee of 10% of the Internet Hospital's pre-tax profit shown in the audited reports (whichever is higher).

The agreement is valid for a period of five years from October 25, 2024 (term), and neither party to the agreement has the right to unilaterally terminate the agreement without cause within the first year of the term. Any party to the agreement may terminate the agreement by giving written notice to the other parties at least three months in advance during the second to fifth year of the term. The agreement may be extended by the parties, and a supplemental agreement shall be entered into upon extension.

Under the agreement, Xiamen Yueerwan has agreed to grant GF Chuangzhan (or its nominee) the right to purchase all or part of the shares of Yueerwan Qingdao and the Internet Hospital within the term. The terms and consideration for the acquisition of the shares are subject to further negotiation. If GF Chuangzhan exercises the right to purchase the shares and enters into any specific agreements, the company will make further announcements in accordance with the GEM Listing Rules of the Hong Kong Stock Exchange at the appropriate time.

The Group mainly engages in providing comprehensive hospital services in China. The board of directors believes that by entering into this agreement, the Group can leverage its expertise in hospital and medical management to provide hospital management services to Yueerwan Qingdao and the Internet Hospital, expanding its medical care business to online platforms, and by confirming the management fees collected under the agreement as revenue, broaden its sources of income. Therefore, the board of directors believes that this agreement is entered into on normal commercial terms in the company's day-to-day and general business processes, and is in the overall interest of the company and its shareholders.