Shanghai Xiaonanguo: Plans to open up to 10 new restaurants by the end of June are still in progress.

On the evening of February 13th, Shanghai Xiaonanguo announced on the Hong Kong Stock Exchange that they have noted reports claiming that several restaurants in Shanghai have suddenly closed without prior notice to employees, with shopping mall operators posting "store closure notices" and indicating that lease termination notices have been displayed, and there are rent arrears. The board of directors hereby clarifies that the contents of the report are not accurate and have no substance. The group is currently negotiating with landlords regarding the lease, and as of the date of this announcement, the lease has not been terminated by the company. Four landlords have unilaterally issued termination notices. The board also clarifies that the suspension of operations is part of the group's ongoing brand restructuring and restructuring plan. This plan is part of the group's long-term development strategy, aiming to reduce reliance on the "Shanghai Xiaonanguo" brand and reallocate resources to new dining concepts with lower costs and stronger consumer appeal. The reorganization of the two remaining restaurants is still ongoing, with an expected completion by the end of the first quarter of 2026. The company plans to open up to 10 new restaurants by June 30, 2026, but as of now, no new restaurants have been put into operation.