Qingling Motors (HKEX: 01122) has announced the execution of a repurchase agreement. The agreement, dated June 17, 2026, was signed by the company, Chongqing Transportation Equipment Financial Leasing Co., Ltd., and dealer Wuhan Xinxiang Anda Logistics Co., Ltd.
The subject matter of the repurchase includes the leased assets and the corresponding lease receivables. The assets consist of a batch of 20 new energy vehicles leased by the dealer from the financial leasing company under a financial lease contract. The receivables comprise the lessor's rights against the dealer related to these assets, covering unpaid due rent, the principal portion of all future rent, and the purchase option price, but excluding other fees, penalties, or damages under the lease contract. It also includes related security rights established by the lessor over the vehicles. The financial leasing company will retain legal ownership of the leased assets until either the dealer settles all related debts under the lease contract or Qingling Motors fulfills its repurchase obligations under this new agreement.
In response to national policies and government directives, the company is actively exploring technological innovation and business model transformations for new energy commercial vehicles. This initiative aims to foster deeper integration of the industrial chain, innovation chain, and capital chain for smart, connected new energy vehicles, thereby cultivating and expanding the new energy commercial vehicle industry and market. Currently, although the company's sales of new energy commercial vehicles are growing at a relatively fast pace within the light commercial vehicle sector, the overall sales volume remains relatively low.
Given the generally higher purchase cost of new energy commercial vehicles, customer usage patterns are shifting from outright purchase to leasing models. Consequently, leasing has become a crucial pathway for boosting sales of these vehicles. To this end, Qingling Motors is adopting the financing lease model commonly used by domestic automobile enterprises. It is strengthening cooperation with financial institutions such as commercial banks and financial leasing companies to provide repurchase commitments for financing businesses where customers or dealers purchase the group's new energy vehicles. In this context, the repurchase obligation under the agreement essentially serves as a performance credit enhancement guarantee for the company's own product sales and does not constitute a pure third-party financing guarantee.
The board of directors considers the terms of the repurchase agreement, including the performance bond and repurchase price, and the contemplated transactions thereunder to be fair, reasonable, and in the overall interests of the company and its shareholders. This conclusion is based on several considerations.
Key Factors for the Decision
The repurchase commitment provided by the company is a commonly used guarantee measure within the automotive industry's financial leasing business, which is beneficial for stimulating sales of the company's new energy vehicles and expanding its sales scale and market share.
The company retains the right to monitor the leased assets through technologies like vehicle networking, reducing the risks of asset damage, loss, or the dealer's failure to return them. The company also maintains the right to require the dealer to purchase the assets in their current condition.
The company will establish a digital vehicle operation monitoring platform to oversee asset integrity rates, lease-out rates, utilization efficiency, and payment collection. It will also share data with the financial leasing company.
The company plans to expand into businesses such as the sub-leasing or resale of used vehicles, as well as aftermarket services like vehicle refurbishment and remanufacturing. This is expected to help promote the development of its used vehicle business and increase revenue.
Under the agreement, the dealer is required to pay a performance bond to the company, which can be used to offset any payment shortfalls the dealer may owe.
The arrangement enables the company to receive the full sales proceeds upfront, thereby enhancing the group's fund liquidity and flexibility.