YH Entertainment (02306) has announced that on September 24, 2026, Tianjin Yihua, a wholly-owned subsidiary of the company, entered into a share transfer agreement with Shenzhen Yiqi, pursuant to which Shenzhen Yiqi agreed to transfer to Tianjin Yihua an aggregate of approximately 46.55% equity interest held by Shenzhen Yiqi in Yu Hua Tong Xing, for a consideration of RMB 4 million, which will be paid in cash by Tianjin Yihua to Shenzhen Yiqi on or before completion.
As of the date of this announcement, Yu Hua Tong Xing is owned as to 53.45% by Tianjin Yihua and is therefore a subsidiary in which the company indirectly holds a majority equity interest. Upon completion, Tianjin Yihua will hold the entire equity interest in Yu Hua Tong Xing, and Yu Hua Tong Xing will become an indirectly wholly-owned subsidiary of the company.
Yu Hua Tong Xing is currently an indirectly non-wholly-owned subsidiary of the company. Since the formation of its business cooperation with Shenzhen Yiqi, it has developed a well-established business in the design, manufacturing, and marketing of trendy toys and related products. Since 2025, the launch of the trendy toy business has received satisfactory market popularity and feedback, enabling the company to better utilize its existing internal resources and the market response obtained to further develop its trendy toy business.
The board of directors believes that through the acquisition, the company will be able to hold Yu Hua Tong Xing as an indirectly wholly-owned subsidiary, thereby making the internal decision-making process smoother, integrating resources, and enabling the company to continue developing its trendy toy business with full operational control and greater efficiency. At the same time, the acquisition will enable the company to more effectively integrate and optimize intercompany resources within the group and strengthen synergies between Yu Hua Tong Xing and the company's other business segments, such as its artist management and IP operation businesses. In addition, upon completion, Shenzhen Yiqi will no longer be a connected person of the company at the subsidiary level, which is expected to reduce the scope and administrative costs of future connected transactions between the two parties.
Furthermore, regarding, among other things, the strategic cooperation framework agreement with Shenzhen Yiqi and the transactions contemplated thereunder, on September 24, 2026, Tianjin Yihua, Shenzhen Yiqi, and Yu Hua Tong Xing entered into a termination agreement, pursuant to which the strategic cooperation with Shenzhen Yiqi was terminated.