Precision Tsugami (China) Corporation Limited (1651) has announced plans to renew three continuing connected agreements with its controlling shareholder, Tsugami Corporation (Tsugami Japan), which holds approximately 65.89% of its issued share capital. The company will seek a further three-year extension, up to 31 March 2029, for the existing Technology Licence Agreement, Master Sales Agreement, and Master Purchase Agreement. Concurrently, it has entered into a Technology Amendment Deed concerning trademark usage in Japan and has proposed amendments to the existing Deed of Non-Competition.

Under these renewed arrangements, the Technology Licence Agreement sets out the exclusive licence for the company to use Tsugami Japan’s technology and trademarks for the manufacture and sale of CNC high precision machine tools in the PRC, Hong Kong, and Taiwan, with a non-exclusive licence for sales purposes in Japan. The parties plan to continue this arrangement for another three-year term and adjust aftersales support as outlined in the Technology Amendment Deed.

Two other agreements—covering master sales (the company selling its CNC high precision machine tools to Tsugami Japan) and master purchasing (the company procuring certain parts, machinery, and CNC equipment from Tsugami Japan)—are also set for renewal. These agreements will remain in effect through to 31 March 2029 and include annual cap figures. Over the next three financial years, the announced caps include: (1) technology licence and related fees with upper thresholds of RMB327 million, RMB404 million, and RMB502 million; (2) sales caps of RMB1.3 billion, RMB1.6 billion, and RMB2.0 billion; and (3) purchase caps of RMB455 million, RMB560 million, and RMB700 million.

Additionally, an amendment (the DNC Amendment Deed) to the Original Deed of Non-Competition restricts the scope of non-compete obligations primarily to the PRC, Hong Kong, and Taiwan, aligning with the company’s core sales markets. The proposed amendments aim to safeguard the company’s future development and reflect its business plans accurately.

These measures constitute continuing connected transactions and a connected transaction under the Listing Rules, subject to Independent Shareholders’ approval. An Independent Board Committee, comprised of three independent non-executive directors with no interests in these matters, has been established to advise on the proposals. The company will convene an extraordinary general meeting for Independent Shareholders to vote on the renewals, annual caps, amendment deed, and related arrangements, with a circular containing further details expected to be dispatched on or before 4 March 2026.