ALPHA PRO HLDGS plans to sell 70% economic interest in Shenyang Golden Ant E-commerce for HKD 27.5 million

According to the announcement from ALPHA PRO HLDGS (00948), on September 30, 2025, a wholly foreign-owned enterprise (an indirect wholly-owned subsidiary of the company) entered into a sales agreement with the buyer (Stlet International Group Limited), under which the wholly foreign-owned enterprise will sell and the buyer will purchase the economic interests of the target company (Shenyang Golden Ant E-commerce Co., Ltd.) and the rights to the shareholder loans owed by the target company to the wholly foreign-owned enterprise for a total consideration of HKD 27.5 million.

Upon completion, the target company will no longer be a subsidiary of the company, and the company will no longer hold any interests in the target company. The financial performance of the target company will not be consolidated into the company's consolidated financial statements.

The target company is a limited company established in China, primarily engaged in e-commerce business in China, and holds the necessary licenses and approvals required for its e-commerce operations, including but not limited to the Value-added Telecommunications Business Operating License (ICP License) and the Internet Culture Business Operating License (ICB License).

For the year ended March 31, 2025, due to the economic downturn in China leading to weaker-than-expected consumer demand, revenue growth did not meet expectations, resulting in poor operational performance for the target group. At the same time, significant costs (including operating expenses such as employee costs) were incurred during the initial startup phase, leading to operational losses for the year. In light of the target group's performance since the acquisition, the board of directors began to explore options for disposing of the economic interests and shareholder loan rights and discussed the sale with the buyer.

After considering (i) the consideration for the sale, which represents a premium of 28.8% over the net asset value of 70% of the target group's equity as of March 31, 2025 (including goodwill and intangible assets recognized when the wholly foreign-owned enterprise acquired the economic interests from the registered shareholders in June 2024); (ii) the unclear business prospects of the target group; (iii) the ongoing costs and expenses that would be incurred if the company continued to hold the economic interests; and (iv) the immediate additional liquidity that the completion of the sale would bring to the group, the board of directors believes that it is appropriate for the group to proceed with the sale