China Electronics Optics Valley Union Holding Company Limited (“CEOVU”) has issued a circular dated 29 May 2026 proposing a new three-year Financial Services Agreement with China Electronics Financial Co., Ltd. (“CEC Finance”). The agreement covers deposit, loan and other finance services but only the deposit element requires independent shareholders’ approval at an extraordinary general meeting on 11 June 2026.

Under the proposed 2026 framework, the Group may place funds with CEC Finance on a non-exclusive basis at interest rates no lower than those offered by major PRC commercial banks. The maximum daily deposit balance (funds settlement balance) is capped at RMB300.00 million for each of the three financial years ending 29 June 2029.

The new cap is 50% lower than the existing RMB600.00 million limit that runs until 29 June 2026. Historical utilisation has remained modest: 38.75% in FY2024, 43.32% in FY2025 and 35.00% for the period 30 June 2025 to 13 May 2026, with the highest daily balance reaching RMB259.94 million.

Management attributes the continued need for CEC Finance’s deposit services to CEOVU’s sizeable cash reserves—approximately RMB1.56 billion at 31 December 2025—and potential inflows from a RMB1.00 billion revolving credit facility signed with CEC Finance in December 2024.

Internal safeguards include quarterly benchmarking of deposit rates against at least two major commercial banks, daily monitoring to ensure balances stay within approved caps, and annual reviews by the company’s auditors and independent non-executive directors. CEC has also undertaken to inject capital into CEC Finance if liquidity issues arise.

Because CEC Finance is an 85.84%-owned subsidiary of CEOVU’s substantial shareholder China Electronics Corporation, the deposit arrangement constitutes a discloseable and continuing connected transaction under Chapter 14A of the Hong Kong Listing Rules. China Electronics International Information Service Co., Ltd., holder of 34.42% of CEOVU’s shares, will abstain from voting.

An independent board committee and appointed adviser Gram Capital both conclude that the agreement and the new caps are fair, reasonable, and in the interests of shareholders. CEOVU’s board recommends voting in favour of the proposal at the upcoming EGM.