Jia Yao Holdings Limited (stock code 01626) has signed a Sale and Purchase Agreement to acquire 80% of Ninety Investment Holding Ltd., an AI-powered internet game developer and enterprise AI solutions provider.

Key transaction terms • Maximum consideration: HK$430.50 million, to be settled entirely through the issue of up to 20.50 million new Jia Yao shares at HK$21.00 each under the existing general mandate. • Dilution: the new shares represent 3.42% of current issued share capital and 3.30% of the enlarged share base. • Pricing: the issue price is set at a 17.90% discount to the last close (HK$25.58), 18.60% to the five-day average and 14.89% to the ten-day average prior to signing.

Profit guarantee & escrow arrangement • The vendor and its guarantor pledge that the target group will deliver at least HK$50.00 million net profit after tax for the year ending 31 December 2026. • Consideration shares will be held in escrow; the final number released to the vendor will be adjusted pro-rata to actual profit. No shares will be issued if the target posts a loss.

Valuation highlights • Independent valuation places 80% of the target at approximately HK$432.00 million, derived from a 10.80× size-adjusted forward P/E applied to the profit guarantee. • Median forward P/E of 16 listed mobile-game peers (after adjustments and outlier removal) was 9.84× before applying discounts for lack of marketability and adding a control premium.

Financial snapshot of target (unaudited) • FY2025 revenue: HK$2.29 million; net loss: HK$1.42 million. • FY2026 revenue: HK$5.48 million; net profit: HK$0.36 million. • Net liabilities at 31 March 2026: HK$1.05 million.

Post-completion structure Assuming full release of all consideration shares, the vendor will hold 3.30% of Jia Yao’s enlarged share capital, while majority shareholder Spearhead Leader Limited will retain 67.48%.

Regulatory status and timetable • The deal qualifies as a “discloseable transaction” under Chapter 14 of the Hong Kong Listing Rules. • Completion is subject to standard conditions precedent, including due diligence, regulatory approvals and listing of the new shares. The long stop date is 11 September 2026; completion is set for within three business days after all conditions are met.

Strategic rationale Jia Yao—currently focused on electronic-cigarette design, production and ancillary services—views the acquisition as a diversification move into the high-growth AI application arena, gaining access to an experienced AI and gaming development team without immediate cash outflow.