XIABUXIABU (00520) plans to acquire 40% of the equity of XIABUXIABU (China) Food for 89 million yuan.

XIABUXIABU (00520) announces that on April 17, 2025, the company plans to acquire 40% equity of the target company, XIABUXIABU (China) Food Holdings Limited, from Mr. He Guangqi (Chairman of the Board of Directors, Executive Director and controlling shareholder) for RMB 89 million. The target company is a limited liability company registered in the Cayman Islands and is an investment holding company. The target company is a joint venture established by the company and Mr. He Guangqi in 2016. As of the date of this announcement, its issued share capital is USD 1 million, with USD 600,000 contributed by the company and USD 400,000 contributed by Mr. He Guangqi. As of the date of this announcement, the target company directly wholly owns Xiabu (Hong Kong) Food, which is a company registered in Hong Kong, primarily engaged in investment holding. Xiabu (Hong Kong) Food has four wholly-owned limited liability subsidiaries in mainland China, namely: (i) Xiabu (China) Food, mainly engaged in the research, production and sale of seasonings; (ii) XIABUXIABU (Shanghai) Food Co., Ltd.; (iii) XIABUXIABU (Shanghai) Food Trade Co., Ltd.; and (iv) Beijing XIABUXIABU Food Co., Ltd., all mainly engaged in food sales. In addition, it also holds a 50% stake in a joint venture company established in China, mainly engaged in food sales - Richen Food (Tianjin) Co., Ltd. The company believes that the excess profit of the target group will be fully included in the group's financial statements, and the acquisition will increase the net profit that the company owner is entitled to. The acquisition also reflects the company's confidence in the prospects of the seasoning business mainly carried out by the target group, and it is expected to create long-term returns for shareholders. The target group offers a variety of seasoning products, including soup bases, dipping sauces, seasoning sauces, various compound seasonings, and gift packaging and limited edition products for mid- to high-end customers. It has established a nationwide distribution network in China, covering 27 provinces, municipalities, and autonomous regions, over 400 chain supermarkets, and over 10,000 traditional retail outlets (including convenience stores, community stores, and fresh stores) as of December 31, 2024. Since the outbreak of the COVID-19 pandemic, pre-packaged foods have been widely welcomed, especially among busy individuals who want to cook at home. The sales of hotpot seasonings have continued to grow, driven by the growing trend of consumers enjoying hotpot at home. Hotpot seasonings provide a quick and easy way for people to enjoy home-style flavors. By increasing its stake in the target group, the company is ready to serve dine-in and delivery customers, thereby building a balanced and diversified business model in the catering industry. After the completion of the transaction, the target company will become a wholly-owned subsidiary of the company and will continue to be fully consolidated in the group's financial performance. Over the past three years ending December 31, 2024, the group's seasoning business division has continued to be profitable. Given that the target company, as a core operation of the group's seasoning business division, has a profitable performance, this acquisition is expected to enhance the group's long-term financial performance and have a positive impact on the company's profit and financial performance after the transaction is completed.