Hong Kong-listed aluminium fabricator XINGFA ALUM (the “Company”) has issued a supplemental announcement clarifying key terms and compliance matters related to its 2025 Henan and 2025 Jiangxi tenancy agreements, both signed with connected parties Henan Jingxing and Jiangxi Jingxing, indirect non-wholly owned subsidiaries of substantial shareholder China Lesso.
The Company reiterated that—effective 1 July 2025—leased areas were downsized, triggering automatic rent reductions: (1) Henan: a 9,700 m² outdoor yard was surrendered; (2) Jiangxi: dormitory space shrank from 1,184 m² to 212 m² and a 615 m² canteen lease ended. Rents for both sites were benchmarked against third-party factory leases within 5–20 km radii, with the Board affirming that final rates align with prevailing market levels and are no more favourable than terms offered to independent parties.
All rental dues have been settled promptly. Payments under the Henan contracts were cleared in the first week of each following month; Jiangxi rents were likewise settled monthly, with January 2025 paid in March 2025. Actual transaction values for full-year 2025 remained within previously disclosed annual caps, and no overdue balances exist.
The agreements constitute continuing connected transactions under Chapter 14A of the Hong Kong Listing Rules. Individually, the Henan transactions fall below the 0.1 per cent de minimis threshold, while the aggregate of Henan and Jiangxi agreements exceeds 0.1 per cent but remains below 5 per cent, subjecting them to reporting, announcement and annual review requirements without necessitating circulars or independent shareholder approval.
Directors, including independent non-executive members, consider the tenancy terms fair, reasonable and in the interests of shareholders, citing market-aligned pricing and space-linked rental adjustments. The Board acknowledged a procedural delay in executing the Jiangxi contracts—attributed to protracted tenant negotiations—which breached Rule 14A.34 by commencing the connected transaction before signing.
To prevent recurrence, XINGFA ALUM has rolled out a five-point remediation plan: 1) mandatory pre-signing compliance reviews led by the Company Secretary; 2) formal non-renewal notices if agreements are not finalised one month pre-expiry; 3) joint monthly reviews of all connected transactions by finance and company secretarial teams; 4) comprehensive staff training on Chapter 14/14A requirements (initiated on 11 June 2026); 5) compulsory two-month advance submission of any contract amendments involving connected parties.
The Board emphasised that the lapse was isolated and unintentional, and confirmed its commitment to strengthened internal controls and ongoing compliance with Hong Kong’s Listing Rules.