INKEVERSE (03700) subsidiary intends to sell a 40% equity stake in Guangzhou Kuaichuang Network Technology Co., Ltd. for RMB 80 million.

INKEVERSE (03700) announces that on October 9, 2026 (after trading hours), the parties entered into an equity transfer agreement, pursuant to which the seller, INKEVERSE (Hainan) Technology Co., Ltd. (an indirectly wholly-owned subsidiary of the Company), has conditionally agreed to sell, and the buyer, Guangzhou 1846 Technology Co., Ltd. (a connected person of the Company at the subsidiary level), has agreed to purchase the sale shares, at a consideration of RMB 80 million. As at the date of this announcement, the Group indirectly holds a 40% equity interest in the target company, Guangzhou Kuaichuang Network Technology Co., Ltd. Upon completion of the disposal, the Group will no longer hold any equity interest in the target company. Accordingly, the target company will cease to be a subsidiary of the Company, and its financial results will no longer be consolidated into the Group's consolidated financial statements. The Directors consider that, in an increasingly competitive and rapidly changing market, coupled with the target group's fluctuating profitability and uncertain recovery prospects, continuing to invest in the target group's traditional micro-short drama production business would expose the Group to risks of rising costs and uncertain returns. Through the disposal, the Group can mitigate the uncertainty of obtaining investment returns from the target group. At the same time, the disposal will enable the Group to reallocate its financial and management resources to its core businesses and other strategic opportunities that can provide more sustainable returns. The Board intends to apply the net proceeds from the disposal of approximately RMB 72.8 million (after deducting estimated tax expenses and transaction costs of approximately RMB 7.2 million) to strengthen the Group's core businesses and support its strategic AI transformation. This includes allocating approximately RMB 54.6 million for the continuous optimization of the Group's underlying AI computing infrastructure and the research and development of multimodal AI applications, thereby empowering the expansion of the Group's overseas innovative businesses; and allocating approximately RMB 18.2 million as general working capital of the Group and for the daily administrative expenses of its overseas team.