Guangshen Railway Company Limited (00525) has entered into two easement agreements with Guangdong Guangshan Railway Co., Ltd. (Guangshan Company) and China Railway Guangzhou Group Co., Ltd. Guangzhou Headquarters (GRGC Guangzhou Headquarters) to support the new Guangzhou (Xintang)–Shanwei Railway Project. One involves reconstruction works at Xintang Station, and the other covers land use in Zengcheng District.

Under the Xintang Station Easement Agreement, Guangshen Railway, as the dominant owner, will utilize Guangshan Company’s land for 50 years. The one-off consideration amounts to RMB140.5512 million (inclusive of tax). Meanwhile, the Zengcheng Section Easement Agreement allows Guangshan Company to use Guangshen Railway’s land in Yongning, Xintang, and Xiancun Towns for up to 50 years, resulting in a one-off consideration of RMB208.9367 million (inclusive of tax) payable to Guangshen Railway.

These transactions constitute connected transactions because GRGC, the controlling shareholder of Guangshen Railway with approximately 37.12% shareholding, has significant influence over Guangshan Company and operates GRGC Guangzhou Headquarters. They fall under the reporting and announcement requirements of Chapter 14A of the Listing Rules but are exempt from circular and independent shareholders’ approval.

Guangshen Railway expects a one-off net income of about RMB68.38 million from these connected transactions, along with an annual increase of around RMB3 million in non-operating profit before tax over the specified land-use periods. The proceeds are set to be used for general working capital, with the company stating that the agreements and their terms are on normal commercial terms and in the best interests of shareholders.