Securities Code: 002431 Securities Abbreviation: Palm Co., Ltd. Announcement No.: 2026-046 Palm Eco-Town Development Co., Ltd. Special Explanation Regarding the Proposed Non-Distribution of Profits for 2025 The Company and all members of the Board of Directors guarantee the truthfulness, accuracy, and completeness of the information disclosed, and are free from false records, misleading statements, or significant omissions. Palm Eco-Town Development Co., Ltd. (hereinafter referred to as the "Company") held the sixth meeting of the seventh Board of Directors on April 23, 2026, and deliberated and passed the "Proposal on the Proposed Non-Distribution of Profits for 2025." The relevant matters are hereby announced as follows: I. Company's 2025 Profit Distribution Proposal According to the "Palm Eco-Town Development Co., Ltd. 2025 Audit Report" issued by Daixin Certified Public Accountants (Special General Partnership), the net profit attributable to shareholders of the listed company in the consolidated statements for 2025 was -1,190,561,508.45 yuan. As of the end of 2025, the distributable profit for the parent company's shareholders was -3,560,795,815.58 yuan, and the distributable profit in the consolidated statements was -4,613,507,470.36 yuan.
- In accordance with the "Notice on Further Implementing the Matters of Cash Dividend Distribution for Listed Companies" and "Supervision Guidelines for Listed Companies No. 3 - Cash Dividend Distribution for Listed Companies" issued by the China Securities Regulatory Commission, and relevant provisions of the "Articles of Association," given that the parent company's net profit for 2025 was negative, and as of the end of 2025, the undistributed profits in the consolidated statements and the parent company statements were also negative; furthermore, Daixin Certified Public Accountants issued an audit report with a paragraph on significant uncertainty regarding going concern for the Company's 2025 financial statements, the Company is not in a position to distribute cash dividends. Therefore, the Company's profit distribution proposal for 2025 is: no cash dividends will be distributed, no bonus shares will be issued, and no capital reserve will be converted into share capital in 2025.
- In accordance with the "Rules for Share Repurchases by Listed Companies" issued by the China Securities Regulatory Commission and the "Self-Regulatory Guidelines for Listed Companies No. 9 - Share Repurchases" issued by the Shenzhen Stock Exchange: where a listed company uses cash to repurchase shares through tender offers or centralized bidding and cancels them, the amount of repurchased shares cancelled in the year shall be deemed as cash dividend amount and included in the calculation of the relevant proportion of cash dividends for that year. In 2025, the Company cumulatively repurchased 20,823,000 shares through centralized bidding transactions, with a total repurchase amount of 50,049,719.29 yuan (excluding transaction costs). According to the "Share Repurchase Plan," 50% of the repurchased shares will be cancelled to reduce the Company's registered capital, and 50% will be used for equity incentives at an appropriate time in the future. The Company cancelled 50% of the repurchased shares on December 18, 2025, which is 10,411,500 shares, with a repurchase and cancellation amount of 25,024,859.64 yuan. In accordance with the aforementioned regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange, the repurchase and cancellation amount of 25,024,859.64 yuan is deemed as the cash dividend amount for the Company, and the dividend amount accounts for 2.10% of the absolute value of the net profit attributable to the shareholders of the listed company in 2025. II. Specifics of the Cash Dividend Plan | Item | Current Year (2025) | Previous Year (2024) | Year Before Previous Year (2023) | |---|---|---|---| | Total Cash Dividend (RMB) | 0 | 0 | 0 | | Total Repurchase and Cancellation (RMB) | 25,024,859.64 | 0 | 0 | | Net Profit Attributable to Shareholders of the Parent Company (RMB) | -1,190,561,508.45 | -1,578,841,417.48 | -939,894,875.96 | | Accumulated Undistributed Profit at Year-End (Consolidated Statements) (RMB) | -4,613,507,470.36 | | | | Accumulated Undistributed Profit at Year-End (Parent Company Statements) (RMB) | -3,560,795,815.58 | | | | Whether the Company Has Completed Three Full Fiscal Years | Yes | | | | Total Cash Dividends for the Most Recent Three Fiscal Years (RMB) | 0 | | | | Total Repurchase and Cancellation for the Most Recent Three Fiscal Years (RMB) | 25,024,859.64 | | | | Average Net Profit for the Most Recent Three Fiscal Years (RMB) | -1,236,432,600.63 | | | | Total Cash Dividends and Repurchase and Cancellation for the Most Recent Three Fiscal Years (RMB) | 25,024,859.64 | | | | Whether the Company Has Triggered Other Risk Warnings Due to Failure to Meet Dividend Requirements Under Article 9.8.1 (IX) of the Stock Listing Rules | No | | | III. Reasons for Not Triggering Other Risk Warnings Due to Failure to Meet Dividend Requirements Given that the undistributed profits in the consolidated statements and parent company statements for 2025 are negative, the conditions for profit distribution are not met. The Company has not triggered the circumstances under Article 9.8.1 (IX) of the "Shenzhen Stock Exchange Stock Listing Rules" for being subject to other risk warnings due to failure to meet dividend requirements. IV. Explanation of the Reasons and Reasonableness for Not Distributing Profits The "Articles of Association" and the Company's "Three-Year Shareholder Return Plan (2023-2025)" stipulate the following regarding cash dividends: "1. Conditions and Proportion of Cash Distribution: The distributable profit for the current year (i.e., profit after the company makes up for losses and draws statutory common reserve funds) shall be positive; the audit institution shall issue an audit report with a standard unqualified opinion on the company's financial statements for the current year; and the company shall not have major investment plans or major capital expenditures. In such cases, the company shall distribute dividends in cash.
- The cumulative cash dividends distributed by the company in the most recent three years shall not be less than 30% of the average annual distributable profit realized in the most recent three years." Given that the Company's net profit for 2025 was negative, and the audit institution issued an audit report with a paragraph on significant uncertainty regarding going concern for the Company's 2025 financial statements, the conditions for cash dividends stipulated in the "Articles of Association" and the "Three-Year Shareholder Return Plan (2023-2025)" are not met. Furthermore, due to losses incurred in 2023 and 2024, the average distributable profit over the most recent three years is negative. Therefore, the Company's decision not to distribute cash dividends for 2025 complies with the relevant regulations of the China Securities Regulatory Commission, the Shenzhen Stock Exchange, and the "Articles of Association," and does not trigger the circumstances under Article 9.8.1 (IX) of the "Shenzhen Stock Exchange Stock Listing Rules" for being subject to other risk warnings due to failure to meet dividend requirements. V. Decision-Making Procedures for Profit Distribution
- Board of Directors' Deliberation The sixth meeting of the seventh Board of Directors was held, with 9 votes in favor, 0 votes against, and 0 abstentions. The meeting unanimously approved the "Proposal on the Proposed Non-Distribution of Profits for 2025" and agreed to submit this proposal to the Company's 2025 Annual Shareholders' Meeting for deliberation.
- Audit Committee's Opinion The Audit Committee, after review, believes that the Company's proposal not to distribute cash dividends, issue bonus shares, or convert capital reserve into share capital in 2025 is legal, compliant, and reasonable, and conforms to the "Articles of Association" and "Supervision Guidelines for Listed Companies No. 3 - Cash Dividend Distribution for Listed Companies." The committee agrees with this profit distribution proposal and agrees to submit this proposal to the Company's 2025 Annual Shareholders' Meeting for deliberation. VI. Documents for Reference
- Resolution of the Sixth Meeting of the Seventh Board of Directors;
- Resolution of the Audit Committee. This announcement is hereby made. Palm Eco-Town Development Co., Ltd. Board of Directors April 24, 2026