SHANSHAN (01749) acquires trademark for RMB 9.33807 million.

SHANSHAN (01749) announces that since 2021, the Company has entered into multiple trademark license agreements with Shanshan Group, under which the Group was granted the license rights to the trademarks, valid for the periods stipulated in the respective trademark license agreements. The current trademark license agreement is valid until December 31, 2029. Pursuant to the reorganization plan approved by the People's Court of Yinzhou District, Ningbo City, Zhejiang Province, certain assets of Shanshan Group (including the trademarks) have been sold through public auction in accordance with applicable Chinese laws and regulations. In view of the Company's intention to continue using the trademarks in its existing sub-licensing business, it participated in the public auction and was confirmed as the winning bidder for the trademarks on September 28, 2026, with a bid price of RMB 9.33807 million. The Company will, on or before October 26, 2026, enter into an auction transaction confirmation with the administrator regarding the terms of the Company's successful bid for the trademarks and the acquisition. The announcement states that the trademarks refer to, as contemplated by the trademark license agreements and the auction transaction confirmation, 29 trademarks registered by Shanshan Group relating to "fabrics, textiles, bed sheets, tablecloths, carpets, floor mats, matting, linoleum and other floor coverings, non-textile wall hangings," including the "Shanshan" and "FIRS" brands (Classes 24 and 27). The Company is principally engaged in the apparel and accessories business, of which the home apparel series is an indispensable part. The Company has historically leased the trademarks from Shanshan Group and obtained stable licensing income by sub-licensing the trademarks to independent third parties. Given that such arrangements have been effective and profitable in the past, the acquisition of the trademarks will enable the Company to continue and further develop this business segment. The Company considers that the discounted cash flow method is the most appropriate valuation method, as the value of the trademarks mainly derives from the future income expected to be generated through the Company's sub-licensing business. Although the license fees previously paid by the Group to Shanshan Group for the trademarks serve as an important reference benchmark, after completion of the acquisition, the Group will no longer be required to pay such license fees to Shanshan Group. The license fees paid to Shanshan Group did not fully reflect the future cash flows expected to be generated from sub-licensing the trademarks to independent third parties, nor did they reflect the costs associated with maintaining and operating the business. Accordingly, the valuation was prepared based on the projected revenue from sub-licensing the trademarks and the estimated costs and expenses attributable thereto, which the Company considers to be a fair and reasonable basis for assessing the fair value of the trademarks.