Accounting for 11.21% of DUIBA's (01753) total share capital! The largest founder donation to an ESOP by share ratio in Hong Kong stock market history

On the evening of September 20, DUIBA (01753) announced that its controlling shareholder, Xiaoliang Holding Limited ("Xiaoliang Holding"), entered into a gift agreement with an employee shareholding incentive platform on September 20, 2026. Under the agreement, Xiaoliang Holding will transfer a total of 120,682,000 shares of the company to the employee shareholding platform free of charge, representing approximately 11.21% of the company's total issued share capital (excluding treasury shares) as of the announcement date. Following the transfer, Xiaoliang Holding will hold a total of 333,870,000 shares of the company, equivalent to approximately 31.01% of the company's total issued share capital. The transfer will not result in any change in the company's controlling shareholder. The aforementioned shares are expected to be used for awards already granted or to be granted under the company's employee incentive plan. According to disclosure information registered with the Stock Exchange, DUIBA announced shortly after its listing in 2019 that the founder voluntarily extended the lock-up period on his personal shareholding to three years. More than seven years since listing, the founder has never reduced his personal shareholding. This first major equity move seven years after listing is not a cash-out, but rather the use of existing shares representing 11.21% of total share capital for talent incentive and talent development. According to public information statistics, this donation is also the largest founder donation to an employee shareholding platform by share ratio in Hong Kong stock market history to date. Based on the AI technology-driven high-growth business strategy, the employee incentive platform has committed that future new incentive plans will primarily be used for talent incentives required for the development of AI businesses, including the AI short drama business. This gift arrangement reflects the confidence and support of DUIBA Group's major shareholder in the company's long-term development, and aims to further strengthen the long-term orientation of core talent, thereby helping to achieve the company's medium- and long-term strategic goals. Controlling shareholder transfers shares to employee shareholding platform free of charge; vesting and lock-up periods strengthen long-term incentives for core team From this arrangement, the controlling shareholder is supporting the employee shareholding incentive platform through a free transfer of existing shares, rather than implementing incentives through the company's issuance of new shares or the use of its own funds. Analysts pointed out that this approach does not dilute the interests of minority shareholders, does not consume company cash, and does not affect the company's profit or cash flow. Against the backdrop of technology companies and content companies generally strengthening talent incentives, the controlling shareholder's use of its own shares to support core team building reflects both its confidence in the company's long-term value and its recognition of the core team's contributions, which helps optimize the company's governance structure and strengthen incentive and constraint mechanisms. In addition, all awards granted under existing and future new incentive plans must comply with the vesting and lock-up arrangements under the company's equity incentive management measures. This arrangement helps attract and retain key talent and promotes the sharing of long-term development outcomes between the core team and the company. For the AI business segment, which is currently in a business expansion phase, a stable and sustainable talent team is the organizational guarantee for continuous innovation and scaled output. Through this arrangement, the company is expected to further consolidate its talent advantages, enhance team stability and competitiveness, and provide organizational support for subsequent business breakthroughs. Incentive resources focus on AI short drama business; human capital supports AI-driven high-growth strategy The announcement clearly stated that, in order to support the AI technology-driven high-growth strategy, the employee shareholding platform has committed that future new incentive plans will mainly be directed toward the core team required for the development of the AI short drama business. This means that the company's equity incentive resources will be further concentrated in the AI short drama business, using human capital as a link to accelerate the building of technology, content, and operational capabilities. From a strategic perspective, this is not only an incentive arrangement, but also a manifestation of the company's determination in strategic transformation. DUIBA is currently transforming into an AI-Native content platform with AI as its operating system. Its single-person production model allows one person to independently complete the entire process from script comprehension, storyboard breakdown, virtual character generation, scene matching, to final output; its self-developed screenwriting Agent increases the efficiency of frontline screenwriters by 5 to 8 times. After standardized training, this system can be replicated in batches by high-quality production teams. In DUIBA's AI-Native system, talent is an important carrier of core capabilities and a key element in driving the system's continuous iteration. Implementing incentives for core talent helps ensure the stable operation and continuous optimization of this system. AI short drama business shows outstanding growth; multiple dimensions validate the effectiveness of AI-driven high growth According to public information, since the launch of its AI short drama business in January 2026, DUIBA Group has achieved outstanding results amid the industry's competition characterized by "high supply, low hits": native views on Douyin grew by 178% cumulatively from June to August, ranking steadily in the top 4 for three consecutive months, entering the TOP3 in July-August, and becoming the only company among leading companies to maintain high growth of over 50% for two consecutive months. Entering September, it continued to rank 2nd in the latest weekly rankings, with growth momentum continuing. Behind the rapid business growth, the company's overall operating performance also achieved simultaneous breakthroughs. The company's 2026 interim financial report shows that total revenue in the first half of the year reached RMB 435 million, a year-on-year increase of 24.34%. Among this, the AI short drama business contributed revenue of RMB 223 million, accounting for 51.2% of total revenue, becoming the core engine driving performance growth. The AI short drama business has not only become the company's main revenue source, but also validated the implementation effectiveness of the company's AI-driven high-growth strategy. The ranking results and interim report data corroborate each other, reflecting both the explosiveness of the business and the company's determination in strategic transformation. From SaaS business to AI short drama, from traditional content production to an AI-Native platform, the transformation has entered a stage where revenue structure and organizational capabilities are switching in tandem. At the secondary market level, after the disclosure of AI short drama business progress on August 24, DUIBA's stock price experienced a continuous upward trend. As of the close on September 18, the company's stock price was HK$0.615, up approximately 3.42 times cumulatively from before that announcement; during the period, the average daily turnover was approximately HK$10.4635 million, setting a new high for average daily turnover in the past four years, making it one of the stocks with higher attention in the recent Hong Kong stock market. AI short drama is currently the company's high-growth and key future strategic development direction. Tilting incentive resources toward this field helps clarify the strategic direction, bind core talent, and promote business breakthroughs. After the completion of this share gift and the gradual implementation of subsequent incentive plans, it will help the company further consolidate its talent foundation and improve execution efficiency in the AI short drama and AI comic drama tracks, providing talent support and institutional guarantees for subsequent business progress.