AviChina Industry & Technology Company Limited (AVICHINA, 02357) has announced plans to renew five key connected-party framework agreements with controlling shareholder Aviation Industry Corporation of China (AVIC) and related entities for a new three-year term (1 Jan 2027 – 31 Dec 2029) and to raise 2026 caps under its existing service pact with AVIC.

Key points:

1. Renewal of Five Framework Agreements (2027-2029) • AVIC Mutual Product Supply: Proposed expenditure caps set at RMB 19.06 billion, RMB 19.63 billion and RMB 19.83 billion for 2027-2029, while revenue caps are RMB 33.83 billion, RMB 35.70 billion and RMB 37.51 billion. • AVIC Mutual Service Supply: Expenditure caps of RMB 3.19 billion annually for 2027-2029; revenue caps climb from RMB 6.82 billion in 2027 to RMB 7.72 billion in 2029. • Land Use Rights, Properties & Equipment Leasing: Right-of-use asset caps fixed at RMB 0.80 billion per year; lease income to AVICHINA capped at RMB 0.20 billion annually. • Financial Services with AVIC Finance: – Deposits: Maximum daily balance (including interest) limited to RMB 43.00 billion each year (classified as a Major Transaction under HKEX rules). – Other Financial Services: Annual caps of RMB 2.00 billion. – Factoring Services: Annual caps of RMB 1.00 billion (partly exempt). • Shenyang Xinghua Mutual Product & Service Supply: Expenditure caps of RMB 0.15 billion per year; revenue caps of RMB 0.12 billion in 2027, tapering to RMB 0.10 billion in 2028-2029.

2. 2026 Cap Uplift for Existing AVIC Service Agreement • Expenditure cap lifted from RMB 1.50 billion to RMB 3.18 billion (3.18 billion) for 2026. • Revenue cap raised from RMB 5.30 billion to RMB 6.11 billion. • Management cites higher demand for AVIC’s manufacturing services and increased aviation engineering work provided by AVICHINA.

3. Listing Rules Classification • Deposits, mutual supply of products and services, and certain other financial services exceed 5% of applicable ratios, requiring Independent Shareholder approval and circular disclosure. • Deposit Services exceed the 25% ratio, constituting a Major Transaction; Other Financial Services fall under a Discloseable Transaction. • Factoring, leasing, and Shenyang Xinghua transactions fall within 0.1%-5% ratios and are partly exempt from shareholder approval.

4. Governance Measures • An Independent Board Committee comprising all independent non-executive directors will review the Non-exempt Transactions and the revised 2026 caps. • Somerley Capital Limited has been appointed as Independent Financial Adviser. • Directors associated with AVIC have abstained from voting on the relevant board resolutions.

5. Next Steps • An extraordinary general meeting will be convened; AVIC and its associates (59.63% shareholding) will abstain from voting. • The shareholder circular is scheduled for dispatch on or before 26 October 2026.

AVICHINA states that the renewed frameworks ensure continuity of supply, operational efficiency, and competitive pricing within the AVIC group, while the enlarged 2026 caps align with anticipated growth in service demand and aviation engineering output.