MEILAN AIRPORT (00357) plans to sell 6% of the total equity of Hainan Airport Holdings to Hainan Airport Development.

MEILAN AIRPORT (00357) announced that on August 21, 2026, its wholly-owned subsidiary, Ruigang Logistics, entered into a share transfer agreement with Hainan Airport Development. Ruigang Logistics will sell, and Hainan Airport Development will acquire the target equity (equivalent to 6% of the total equity of Hainan Airport Holdings). According to the share transfer agreement, Hainan Airport Development will pay Ruigang Logistics a total price of RMB 109 million for the transfer of the target equity. On July 20, 2026, the Company's subsidiary, China-New Airport, entered into a duty-free franchise agreement with an independent third party, China Duty Free Group. China Duty Free Group has the right to manage, operate, and engage in duty-free sales in designated areas of Meilan Airport, with a term from July 20, 2026, to February 7, 2033. On August 21, 2026, China-New Airport, China Duty Free Group, and Hainan Duty Free entered into a tripartite replacement agreement, whereby Hainan Duty Free will assume all rights and obligations of China Duty Free Group under the duty-free franchise agreement. As of June 30, 2026, the 24.5% equity held by Ruigang Logistics in Hainan Airport Holdings has a book value of approximately RMB 312 million in the Company's consolidated financial statements. Based on the book value of long-term equity investments in the independent financial statements of Ruigang Logistics, the appraised value increase of the target equity is approximately RMB 33 million. Upon completion of the sale, the remaining equity will no longer have a significant impact on Hainan Airport Holdings, and the accounting treatment will be reclassified from long-term equity investments to financial instruments. The appraised value of the remaining equity is expected to appreciate by approximately RMB 100 million compared to its book value. According to applicable Chinese accounting standards, upon termination of the equity method, previously recognized capital reserves and other comprehensive income totaling approximately RMB 407 million must be recognized as current profit or loss. Considering the above factors, the expected sale is anticipated to result in the recognition of investment income of approximately RMB 540 million in the Company's consolidated financial statements. The Group's primary business is the operation of Meilan Airport. The equity stake in Hainan Airport Holdings held by Ruigang Logistics is a low-correlated investment asset to the Group's core business. The sale allows the Group to divest non-core assets and concentrate resources on core airport operations. In addition, the proceeds from the sale will be used to repay the Group's debts, reduce interest-bearing debts and financing costs, and are expected to improve the Group's financial condition. At the same time, considering the development of Hainan Free Trade Port, retaining the remaining 18.5% equity in Hainan Airport Holdings allows for a long-term strategic participation in the growth potential of (including) Sanya Phoenix International Airport and provides flexibility for further sale of the relevant equity based on market conditions.