Shenguan Holdings (Group) Limited announced that the Zhiguan Framework Agreement with Guangxi Zhiguan, pursuant to which Guangxi Zhiguan agrees to supply cattle skin and provide cattle skin processing services to the Group for a period of three years commencing from 1 January 2024 to 31 December 2026. For each Transaction with Guangxi Zhiguan, the purchase prices and the processing charges for the cattle skin will be settled by the Group before the 20th day of the subsequent month after the Group has received and examined to the Group's satisfaction the cattle skin or the processing services from Guangxi Zhiguan. The purchase prices for the cattle skin to be payable by the Group under the Zhiguan Framework Agreement are determined with reference to the market price of the cattle skin.

In determining the market price, the parties will make reference to the prices for cattle skin offered by two to three independent suppliers, the difference in the location of cattle skin suppliers, transportation costs and quality of cattle skin of other independent suppliers. The processing charges for the cattle skin to be payable by the Group under the Zhiguan Framework Agreement are determined with reference to the market processing charges of the processing services. In determining the market processing charges, the parties will make reference to the prices for processing services offered by two to three independent suppliers, the difference in the location of services supplier, transportation costs and quality of services.

The parties will also make reference to other terms offered by independent suppliers for such processing services. For the avoidance of doubt, the terms to be offered by Guangxi Zhiguan to the Group shall be no less favourable than those offered by independent suppliers.