On 18 September 2026, Yunfeng Financial Group Limited (YFGL, stock code 00376) signed a Sale and Purchase Agreement to dispose of its entire 100% equity interest (125 million shares) in subsidiary Yunfeng Financial Markets Limited (YFML) to Mega Investment (HK) Limited, a special-purpose vehicle wholly owned by YFGL’s chairman and controlling shareholder, Mr. Yu Feng. The transaction constitutes a connected transaction under Hong Kong Listing Rules, with applicable percentage ratios exceeding 0.1% but below 5%; consequently, it requires public reporting and announcement but is exempt from circular and independent shareholders’ approval.
Deal Economics • Initial Consideration: HK$8.05 million, comprising HK$4.00 million licence premium and YFML’s 30 June 2026 unaudited net asset value (NAV) of HK$4.05 million. • Adjustment Mechanism: The consideration will be adjusted dollar-for-dollar to reflect changes in NAV five business days before completion, capped by an upward adjustment of HK$3.95 million, setting the maximum Final Consideration at HK$12.00 million. • Payment Terms: Entire Final Consideration payable in cash on completion. • Longstop Date: One year from signing, extendable by up to 90 days.
Strategic Rationale YFGL is streamlining its licensing structure to focus on digital-asset initiatives. The Group will retain two core licensed entities—Yunfeng Securities Limited (Types 1 & 4 licences, with a virtual-asset dealing uplift approved in September 2025) and Yunfeng Asset Management Limited (Types 4 & 9 licences, with virtual-asset management uplift). YFML, which holds overlapping Type 1, 4 and 9 licences but lacks digital-asset capabilities, will be divested to remove functional redundancy and sharpen strategic focus.
Financial Impact • Gain on Disposal: Approximately HK$4.00 million based on the Initial Consideration. • Use of Proceeds: General working capital. • YFML Financials: – Revenue: HK$8.35 million (2025) vs HK$9.02 million (2024). – Profit/(Loss) After Tax: loss of HK$263.43 million (2025, driven by one-off intra-group impairment) versus profit of HK$5.34 million (2024). Excluding the impairment, 2025 profit would have been HK$5.87 million. – NAV: HK$21.02 million at 31 Dec 2025 (audited); HK$4.05 million at 30 Jun 2026 (unaudited).
Valuation Benchmarks The HK$4.00 million licence premium aligns with market transactions for Hong Kong SFC-licensed entities with Types 1, 4 and/or 9 licences, where premiums ranged between HK$2.50 million and HK$4.00 million. An independent financial adviser appointed voluntarily by YFGL opined that the consideration is fair and reasonable.
Conditions Precedent Completion hinges on regulatory approvals—including SFC consent for Mega to become a substantial shareholder of YFML (already obtained)—accuracy of warranties, absence of material adverse effects, settlement of unclaimed client accounts, and execution of a transitional services agreement. Specified conditions may be waived by either party, except regulatory approvals, which are non-waivable.
Risk Disclosure The deal remains subject to outstanding conditions and may not complete. Shareholders and investors are advised to exercise caution when dealing in YFGL securities.
Board Approval All directors, except Mr. Yu Feng who abstained, consider the terms of the Disposal fair and in the interests of the company and its shareholders.