China Risun Group sells subsidiary for 54.7m yuan, expects significant gain

China Risun Group Limited announced on October 31, 2025, that its wholly-owned subsidiary, Risun Group, entered into an Equity Transfer Agreement to dispose of 100% equity in Xingtai Risun Material New Technology Co., Ltd. to Xuyang New Energy for 54,686,200 yuan. The transaction is expected to generate a gain of approximately 33.7693 million yuan for the company.

Xuyang New Energy is an indirect wholly-owned subsidiary of Xuyang Holding, which is wholly owned by Mr. Yang Xuegang, the company’s controlling shareholder, executive director, CEO, and chairman of the board, together with his spouse, Ms. Lu Xiaomei, also an executive director. This makes the disposal a connected transaction under Chapter 14A of the Listing Rules.

The target company, established in November 2023 with a registered capital of 7 million yuan, has not commenced substantive business operations. The consideration was determined based on the appraised net asset value of 100% equity in the target company, 54,686,200 yuan, as at August 31, 2025, using an asset-based valuation approach due to the absence of operational history. The proceeds will be used for daily operating expenses.