Core Viewpoint - The agreement between Tera Logistics and Harmony Prosper Zambia Limited aims to enhance the logistics and warehousing capabilities of the company, generating stable rental income and improving overall financial health [1][2]. Group 1: Agreement Details - The lease agreement is for a period of 4 years and 11 months, with a monthly rent of $12,500 [1]. - The total construction cost for the buildings to be built by the tenant is capped at $6 million (approximately 46.8 million HKD) [1]. - The leased land includes two plots in Zambia's Copperbelt Province, totaling approximately 95.11 hectares [1]. Group 2: Strategic Benefits - The agreement establishes a long-term strategic partnership, allowing the company to expand its supply chain management services in Zambia [2]. - The tenant is committed to prioritizing the company's transportation services under the same commercial terms, enhancing the overall logistics service offerings [2]. Group 3: Risk Mitigation and Market Expansion - There is a contingent acquisition arrangement that ensures the company can acquire the buildings at book value (after 6.5 years of amortization) at the end of the lease or upon early termination, minimizing upfront construction costs and risks [2]. - The agreement facilitates business expansion in the rapidly growing logistics market in Sub-Saharan Africa, with the tenant's facilities complementing the company's existing supply chain management infrastructure [2].

Financial Performance and Recovery Strategy - The company has experienced three consecutive years of losses primarily due to unexpected factors and intensified industry competition, leading to a decline in main business revenue and fixed costs impacting profits [2] - In 2025, the company aims to achieve profitability by focusing on individual soldier and police protective products while expanding e-commerce channels and enhancing internal control mechanisms [2][3] Business Growth and Market Expansion - The company plans to increase investment in group purchasing and e-commerce channels while strategically reducing offline channels and closing unprofitable stores to enhance profitability [3] - As of the end of 2024, the company operates 34 direct and agency stores, with plans to maintain this number while exploring community and pop-up store models after market research [3] Cost Control Measures - The company is implementing refined cost control mechanisms and enhancing accounts receivable management to improve cash flow and operational efficiency [3][4] Revenue Contribution from Subsidiaries - In 2024, the revenue contribution from the subsidiary Chaoki Technology was 18.11%, while Yudao Technology contributed 17.88% to the company's total revenue [4] Future Growth Potential - The company anticipates growth potential driven by increasing consumer spending, government support for domestic brands, and stable growth in national defense spending, which will benefit the military and police equipment market [3][4] International Expansion Plans - The company is actively exploring foreign trade markets and has established a dedicated export team to capitalize on opportunities arising from global geopolitical tensions [4]