Grand Baoxin Auto Group Limited (Grand Baoxin) has announced the disposal of its entire equity interest in two Xinjiang-based subsidiaries—Karamay Yanbao Automobile Sales & Service and Karamay Xindebao Property Management—to exit a persistently loss-making BMW dealership and its related property business.

Karamay Xindebao, incorporated on 8 April 2011 as an indirect wholly owned unit, owns the dealership premises in Karamay and provides leasing and property management services exclusively to Karamay Yanbao. The property constitutes Karamay Xindebao’s principal asset.

Management cited three consecutive years of operating losses at Karamay Yanbao, driven by intense regional competition, dwindling customer traffic, compressed profit margins and high fixed costs. With limited prospects for a near-term turnaround, the board determined that divesting both entities would immediately release Grand Baoxin from further financial support obligations and operational risks, while enhancing the group’s overall financial position and sharpening strategic focus.

Upon completion, the two exited subsidiaries will cease to be consolidated into Grand Baoxin’s financial statements, allowing the group to concentrate resources on profitable core dealerships and related services.

The transaction constitutes a discloseable transaction under Hong Kong listing rules. No financial assistance or guarantees will be extended to the disposed entities following completion, according to the company statement issued on 10 June 2026.