Tsit Wing International Holdings Limited (2119) disclosed continuing connected transactions arising from an Original Equipment Manufacturing (OEM) Agreement dated 7 February 2024, under which its wholly-owned subsidiary, TW Coffee, provides OEM services to Tai Luen, a wholly-owned subsidiary of Dah Chong Hong Food International Holdings Limited (DCH Food). According to the announcement, DCH Food is a substantial shareholder of Tsit Wing, holding approximately 21% of its total issued shares.

The OEM Agreement, effective from 1 March 2024 for three years, establishes terms for coffee and tea product manufacturing, labeling, and packaging. Service fees are determined on normal commercial terms, reflecting factors including order volume, product type, and production cost changes. Based on historical figures between 1 March 2024 and 31 December 2024, and from 1 January 2025 to the announcement date, the transaction amounts have remained under the de minimis threshold of HK$3 million.

However, looking ahead, the annual caps for 2025 and 2026 are set at HK$3.9 million and HK$4.5 million, respectively, indicating potential growth in processing volume and service fees. The arrangement requires adherence to internal control measures, including regular reviews by designated staff and the finance department, with oversight from senior management and the Audit Committee. The external auditors are also expected to conduct an annual review to verify compliance.

Tsit Wing’s board considers the agreement to be in its ordinary and usual course of business. Because at least one of the applicable percentage ratios exceeds 0.1% but remains below 5%, the transactions are subject to reporting, announcement, and annual review requirements, while exempt from independent shareholders’ approval under the Hong Kong Listing Rules.