Control of KFM KINGDOM (03816) changes hands as Luxshare Precision Industry (02475) acquires 57.0% stake and makes cash offer; trading resumes on October 2

KFM KINGDOM (03816) and the Offeror, Hong Kong Luxshare, jointly announce that on September 13, 2026, the Company entered into subscription agreements with each of the subscribers (namely Hong Kong Luxshare, Subscriber A, Subscriber B, Subscriber C, Subscriber D and Subscriber E), pursuant to which the Company has conditionally agreed to issue, and the subscribers have collectively conditionally agreed to subscribe for, convertible bonds in the aggregate principal amount of HK$360 million. Pursuant to the subscription agreements, the Company has conditionally agreed to issue, and the subscribers have conditionally agreed to subscribe for, the convertible bonds as follows: (a) in the case of Hong Kong Luxshare, a principal amount of HK$252 million on the convertible bond completion date; (b) in the case of Subscriber A, a principal amount of HK$18 million on the convertible bond completion date; (c) in the case of Subscriber B, a principal amount of HK$18 million on the convertible bond completion date; (d) in the case of Subscriber C, a principal amount of HK$18 million on the convertible bond completion date; (e) in the case of Subscriber D, a principal amount of HK$18 million on the convertible bond completion date; and (f) in the case of Subscriber E, a principal amount of HK$36 million on the convertible bond completion date. Upon full exercise of the conversion rights at the conversion price of HK$2.00 per conversion share, a total of 180 million conversion shares will be issued, representing: (i) 30% of the issued share capital of the Company as at the date of this joint announcement; and (ii) approximately 23.08% of the issued share capital of the Company as enlarged by the issue of the conversion shares. The conversion price of HK$2.00 per share: (a) represents a discount of approximately 55.9% to the closing price of HK$4.540 per share as quoted on the Stock Exchange on the last trading day. The gross proceeds from the issue of the convertible bonds will be HK$360 million. The net proceeds from the issue of the convertible bonds will be approximately HK$359 million, and the net price per conversion share will be approximately HK$1.99. The Group expects to apply the net proceeds from the issue of the convertible bonds as follows: (i) approximately 25% for and to expand manufacturing investments in Suzhou, China and Malaysia; (ii) approximately 50% for general working capital; and (iii) approximately 25% for repayment of bank loans. Subscriber A is an investment holding company incorporated in Samoa and wholly owned by Mr. Chen Lu. Subscriber B is an investment holding company incorporated in Samoa and wholly owned by Mr. Yuan Lingzhi. Subscriber C is an investment holding company incorporated in Samoa and wholly owned by Ms. Wang Zhuzhen. Subscriber D is an investment holding company incorporated in Hong Kong and wholly owned by Ms. Wang Hongyu. Subscriber E is an investment holding company incorporated in Samoa and wholly owned by Ms. Yao Lianfang. In view of the substantial capital required to expand the Group's production bases in China, Malaysia or other Southeast Asian regions, Hong Kong Luxshare has introduced Subscribers A to E to participate in the subscription. This enables the Company to meet its expansion funding needs while reducing its reliance on a single investor. The Directors consider that, apart from Hong Kong Luxshare, the participation of Subscribers A to E in the subscription is in the interests of the Group, as it diversifies its shareholder base, strengthens its capital structure, and lays a broader foundation to support its long-term financing needs and future development. On September 13, 2026, KIG Real Estate (as vendor), Mr. Sun Guohua (as guarantor) and Hong Kong Luxshare (as purchaser) entered into a sale and purchase agreement, pursuant to which KIG Real Estate has conditionally agreed to sell, and Hong Kong Luxshare has conditionally agreed to purchase, 342 million shares (representing 57.0% of the issued shares as at the date of this joint announcement) at a total consideration of HK$684 million, equivalent to HK$2.00 per sale share. As at the date of this joint announcement, Hong Kong Luxshare and its concert parties did not hold, own, control or have direction over any shares or other relevant securities of the Company (as defined in Rule 22 of the Takeovers Code). Upon completion of the sale and purchase agreement, Hong Kong Luxshare and its concert parties will have an interest in 342 million shares, representing 57.0% of the issued shares. Under Rule 26.1 of the Takeovers Code, Hong Kong Luxshare will be required to make an unconditional mandatory general offer in cash for all issued shares and other securities of the Company issued (other than those already owned or agreed to be acquired by Hong Kong Luxshare and its concert parties). Subject to completion of the sale and purchase agreement, Cheuk Ya Financing will, on behalf of Hong Kong Luxshare, in compliance with the Takeovers Code and in accordance with the terms set out in the composite document to be issued under the Takeovers Code, make an offer on the following basis: An offer price of HK$2.00 per offer share, equivalent to the consideration of HK$2.00 per sale share under the sale and purchase agreement, and the conversion price of HK$2.00 per conversion share under the Luxshare subscription agreement. The offer price of HK$2.00 per offer share: (i) represents a discount of approximately 36.8% to the closing price of HK$3.165 per share as quoted on the Stock Exchange on September 3, 2026 (being the date immediately prior to the commencement of the offer period). Hong Kong Luxshare is a limited liability company incorporated in Hong Kong. As at the date of this joint announcement, it is a wholly-owned subsidiary of Luxshare Precision Industry (a company established in China, whose A shares are listed on the Shenzhen Stock Exchange (stock code: 002475) and whose H shares are listed on the Main Board of the Stock Exchange (stock code: 2475)). Hong Kong Luxshare is an investment holding and trading company of Luxshare Precision Industry and its subsidiaries, and undertakes business orders for Luxshare Precision Industry and its subsidiaries. Luxshare Precision Industry is principally engaged in the research, development, manufacturing and sale of products in the consumer electronics, automotive electronics, communications and data center, and other end markets. Luxshare Precision Industry is controlled by Luxshare Limited with approximately 35.29% equity interest. Hong Kong Luxshare, Luxshare Precision Industry and Luxshare Limited are ultimately controlled by Ms. Wang Laichun and Mr. Wang Laisheng. The Company has applied to the Stock Exchange for the resumption of trading in the shares on the Stock Exchange with effect from 9:00 a.m. on October 2, 2026.