On 6 July 2026, Zuoli Kechuang Company Limited (HKEX: 06866) executed two three-year connected lease agreements with its controlling shareholder’s parent company, Zuoli Holdings Group Company Limited.
Transaction Structure 1. Company Lease Agreement • Lessee: Zuoli Kechuang • Premises: 22nd floor and shared areas of Zuoli Da Sha Ban Gong Lou, Deqing, Zhejiang (2,022 sq m) • Term: 7 July 2026 – 6 July 2029 • Annual rent: RMB0.65 million • Additional fees: Management fees plus usage charges capped at RMB0.10 million per year
2. Jinhui Micro-finance Lease Agreement • Lessee: Deqing Jinhui Micro-finance Co. (99.76% owned subsidiary) • Premises: 15th floor and shared areas of the same building (2,022 sq m) • Term: 7 July 2026 – 6 July 2029 • Annual rent: RMB0.65 million • Additional fees: Management fees plus usage charges capped at RMB0.20 million per year
Financial Impact • The two leases will be recognised as right-of-use assets totaling RMB3.24 million, matched by equal lease liabilities, in line with HKFRS 16. • Individually, each lease corresponds to a right-of-use asset of approximately RMB1.62 million. • Annual cash outflow for base rents amounts to RMB1.30 million, funded by internal resources.
Regulatory Considerations • Zuoli Holdings is an associate of controlling shareholder Puhua Energy, classifying both leases as connected transactions under Chapter 14A of the HKEX Listing Rules. • The highest applicable percentage ratio is above 0.1% but below 5%, triggering reporting, announcement and annual review requirements; shareholder approval and circular issuance are not required. • Executive Director and Chairman Mr. Yu Yin abstained from voting due to his relationship with Zuoli Holdings’ ultimate controller.
Strategic Rationale The leases secure office space aligned with the operational needs and future development of both Zuoli Kechuang and its micro-finance subsidiary. Board members, including independent non-executive directors, consider the terms arm’s-length, fair and in the interests of all shareholders.