Kanghua Medical (03689.HK) plans to transfer the remaining 45% equity of Kangxin Hospital for 14.201 million yuan

Gelonghui, March 24 — Kanghua Medical (03689.HK) announced that on March 23, 2026, the company (as the seller) and the buyer (including Beijing Legal Industry Group Co., Ltd.) entered into an equity transfer agreement to sell the remaining 45% stake in Kangxin Hospital, with an estimated consideration of RMB 14.201 million. After completion, Kangxin Hospital will no longer be an associate of the company, and its financial performance will no longer be consolidated into the company’s financial statements using the equity method. The group (through its property company) will continue to hold 100% ownership of the land and buildings necessary for Kangxin Hospital’s operations and lease them to Kangxin Hospital.

Chongqing Kanghua Zhonglian Cardiovascular Hospital Co., Ltd. (“Kangxin Hospital”) is a limited liability company established in China, mainly engaged in providing cardiovascular disease treatment services. Kangxin Hospital operates at a leased location from a wholly owned subsidiary of the company, Property Company. As of the date of this announcement, Kangxin Hospital’s registered capital is RMB 64 million, with 45% held by the company and 55% by Yingshan Capital.

According to previous announcements, there were prior transactions involving the transfer of 55% of Kangxin Hospital’s equity to Yingshan Capital. After that transfer, the company retained a 45% stake in Kangxin Hospital, which has been accounted for as an associate using the equity method. Due to the continued underperformance of Kangxin Hospital relative to management expectations, and given the increasingly competitive medical market in Chongqing, the board, after careful consideration, believes that further investment by existing shareholders is neither the best long-term development strategy for Kangxin Hospital nor in the best interests of the company and its shareholders as a whole. To optimize internal resource allocation and ensure sustainable long-term development, the company has decided to introduce investors into Kangxin Hospital and exit its investment through the transfer, adjusting its strategic focus.